Why Is Car Insurance So Expensive? (2026)
Car insurance is expensive due primarily to inflation, rising repair costs, and an increase in severe auto accidents.
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Written byBen Luthi
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Ben LuthiInsurance and Personal Finance Writer
12+ years in personal finance and insurance writing
Former financial analyst
Ben Luthi has been making insurance and personal finance easy to understand for over a decade. Dedicated to helping readers make informed insurance decisions, Ben’s covered just about every personal finance topic under the sun.
His work has appeared in the Wall Street Journal, Fortune Recommends, Yahoo Finance, Experian, Credit Karma, NerdWallet, and many more. Ben lives near Salt Lake City with his two kids and two cats.
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Edited byAshley Cox
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Ashley CoxSenior Managing Editor
7+ years in content creation and management
5+ years in insurance and personal finance content
Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.
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Reviewed byMark Friedlander
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Mark FriedlanderSenior Director, Media Relations, Insurance Information Institute
Media relations director for Insurance Information Institute
20+ years in insurance and communications
Impartial, independent expert
As Senior Director, Media Relations, for Insurance Information Institute, Mark serves as the non-profit’s national spokesperson, sharing information and education on a wide array of insurance issues.
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Table of contents
Car insurance prices have increased sharply in recent years due to inflation, higher repair costs, and more severe auto accidents, among other factors. Average rates rose more than 40% from June 2022 to June 2024, according to Insurify’s latest auto report.
The national average cost of car insurance is $99 per month for liability coverage and $173 per month for full coverage.
Here’s what you need to know about the key factors driving these rising costs and actionable strategies, such as comparing quotes from multiple insurers, to help you save money on your auto insurance.
Quick Facts
Inflation, supply chain issues, and advanced vehicle technology have driven car insurance costs to record highs.
Your credit history, driving record, and location can also significantly affect your premium.
Comparing quotes regularly, dropping unnecessary coverage, and looking for discounts are just a few ways you can save.
Reasons car insurance rates keep rising
Car insurance rates have been climbing for several years, affecting all drivers regardless of their individual profiles. Several major factors are driving these increases, including the following:[1]
Inflation and supply chain issues: The cost of auto parts has skyrocketed due to inflation, while supply chain delays and labor shortages at repair shops have made repairs more expensive and time-consuming.
Advanced vehicle technology: Modern vehicles equipped with sensors, cameras, and driver-assist systems require specialized expertise and costly components when damaged. Even minor fender benders can result in repair bills that would have seemed unthinkable just a decade ago.
Pandemic aftereffects: The COVID-19 pandemic disrupted manufacturing and distribution networks around the world, creating ripple effects that continue to influence vehicle values and repair costs today.
Rising medical costs: Medical expenses associated with auto accident injuries have risen, pushing up the payouts insurers must cover and leading to rate increases across the board.
States with the highest car insurance rates
Auto insurance costs vary dramatically from state to state based on several key factors. For example, states with more urban areas typically see higher premiums due to increased theft, vandalism, and accident rates.[2]
Other regional factors include litigation rates, local repair costs, the prevalence of insurance fraud, the rate of uninsured drivers, and exposure to severe weather events like hurricanes or hailstorms.
Here’s a look at the most expensive states for car insurance, based on Insurify data:
State  | Average Annual Car Insurance Premium: 2026 |
|---|---|
| United States | $2,144 |
| Washington D.C. | $4,017 |
| Maryland | $3,601 |
| Rhode Island | $3,394 |
| Michigan | $3,073 |
| New York | $3,019 |
| New Jersey | $2,983 |
| Delaware | $2,978 |
| South Carolina | $2,956 |
| Georgia | $2,939 |
| Nevada | $2,897 |
Disclaimer: Table data is based on real-time quotes from Insurify’s network of 500+ insurance partners. Actual rates may vary depending on the policyholder’s individual profile and coverage needs.
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Factors that make your car insurance expensive
While broader economic trends affect everyone, your individual car insurance premium also depends on your unique profile.
Insurers evaluate several factors when calculating rates, from your driving history to where you park your car at night. Understanding these variables can help you identify opportunities to lower your costs.
Your driving record
Your driving record significantly affects your rates. At-fault accidents, speeding tickets, and driving under the influence (DUI) convictions signal to insurance companies that you’re a higher risk.
Most violations stay on your record for three to five years, depending on where you live. But serious violations like a DUI can remain for up to 10 years in some states, or even indefinitely.
Drivers with clean records typically pay the cheapest rates. For example, drivers with a clean history pay an average of $173 monthly for full coverage, while drivers with a DUI pay an average of $257 per month for a full-coverage policy, according to Insurify data.
Your location
Where you live plays a major role in determining your car insurance premium. Urban drivers typically pay more than rural residents due to higher traffic levels, increased crash frequency, and elevated theft rates.
State-minimum insurance laws also vary, which can affect coverage costs. Even within the same state, your ZIP code can significantly influence how much you pay for coverage — though California and Michigan prohibit this practice.
Your vehicle type
Sports cars, luxury vehicles, and tech-heavy models come with higher premiums because repairs are expensive.[3] Older cars are usually cheaper to insure since they’re worth less, but a new car might actually save you money through safety discounts.
Be sure to research how much different car brands cost to insure before you buy a new vehicle to avoid any unpleasant surprises down the road.
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Average Car Insurance Rates by Vehicle Model
Your coverage levels and deductibles
Full coverage costs more than a liability-only insurance policy because it also includes collision and comprehensive coverage. Liability insurance only pays for injuries and damage you cause to others, including bodily injury and property damage, while full coverage also protects your vehicle.[4]
The cost of liability coverage can vary based on state minimums and your chosen limits. Collision and comprehensive insurance limits, on the other hand, depend on your vehicle’s value. That said, you can choose your deductible for these coverages, which is the amount you pay out of pocket in the event of a claim.
Lower deductibles mean higher monthly costs, while higher deductibles reduce your monthly bill but increase out-of-pocket expenses after accidents.[5]
Your credit history
In most states, insurers use credit-based insurance scores when calculating premiums. Research shows drivers with good credit file fewer claims, which is why drivers with poor credit tend to pay more for coverage.[6]
California, Hawaii, Massachusetts, and Michigan prohibit insurance companies from using credit history to determine rates. Among the states that do allow it, many prohibit insurance companies from using your credit as the sole reason for hiking your rate.
The cheapest car insurance companies
Shopping around is the best way to find affordable car insurance. While rates vary based on your individual profile, some car insurance companies consistently offer competitive pricing.
The cheapest insurance companies for many drivers include COUNTRY Financial, Auto-Owners, and USAA.
But the cheapest company for your neighbor might not be the cheapest for you. That’s why it’s important to compare quotes from multiple insurers to find your best rate. Here’s a look at five of the cheapest car insurance companies, according to Insurify data:
 |  |  |  |  |
|---|---|---|---|---|
Average price Prices based on average across state-minimum and full coverage car insurance $65/mo* | Average price Prices based on average across state-minimum and full coverage car insurance $65/mo* | Average price Prices based on average across state-minimum and full coverage car insurance $76/mo* | Average price Prices based on average across state-minimum and full coverage car insurance $81/mo* | Average price Prices based on average across state-minimum and full coverage car insurance $75/mo* |
Overall rating 4.0 | Overall rating 4.3 | Overall rating 4.9 | Overall rating 4.0 | Overall rating 4.2 |
Value for money 3.2/5 | Value for money 3.5/5 | Value for money 4.9/5 | Value for money 3.7/5 | Value for money 3.3/5 |
Customer service 3.4/5 | Customer service 3.5/5 | Customer service 4.8/5 | Customer service 4.2/5 | Customer service 3.6/5 |
Claims handling 3.9/5 | Claims handling 4.0/5 | Claims handling 4.9/5 | Claims handling 4.1/5 | Claims handling 3.9/5 |
Special highlight Cheap ratesAI-generated from 35 user reviews | Special highlight Cheap ratesAI-generated from 146 user reviews | Special highlight Members of the military communityAI-generated from 1498 user reviews | Special highlight Customer serviceAI-generated from 7246 user reviews | Special highlight New Jersey driversAI-generated from 17 user reviews |
Data in this table has been sourced from Insurify’s users who have indicated they are insured with the listed providers
Why your rates can increase without a claim
Car insurance rates can climb even when you haven’t filed a claim or had any accidents. That’s because insurers base rates on more than just your driving record.[7]
If you live in a high-traffic area where accidents happen frequently, your rates could rise because of increased claims activity in your region. Also, rising medical costs mean every injury claim costs insurers more, and expensive repairs due to supply chain issues and advanced technology push up claim payouts.
Finally, weather events like hurricanes, hailstorms, and floods cause massive damage across entire regions, and insurers spread those costs among all drivers in affected areas. These external factors affect everyone, regardless of individual driving history.
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How to lower your car insurance costs
Rising premiums don’t mean you’re powerless. The good news is that you can use several proven strategies to meaningfully reduce what you pay for car insurance. Here are a handful to consider.
Compare car insurance quotes regularly
Shopping around is one of the most effective ways to lower your costs. Different insurance companies price identical coverage very differently, sometimes by hundreds of dollars.
Make it a habit to check rates every six to 12 months since insurers constantly adjust pricing based on market conditions.
Practice safe driving habits
Your driving record has a major effect on your auto insurance premiums, and safe driving protects both your car and your wallet. This includes avoiding speeding tickets, at-fault accidents, and other violations.
Many insurance companies offer telematics programs that monitor driving habits, like hard braking and rapid acceleration, and reward safe drivers with discounts.[8] These programs are especially valuable for young drivers and teen drivers, who typically face higher rates.
Increase your deductible
Raising your deductible is one of the quickest ways to lower your monthly premium.[9] A higher deductible means you’ll pay more out of pocket after a claim, but your insurer charges less each month since they’re taking on less financial risk.
If you’re thinking about using this approach, make sure you have enough savings set aside to cover the higher deductible amount if an accident occurs.
Adjust coverage on older vehicles
Comprehensive and collision insurance are worthwhile for newer cars or financed vehicles, but paying premiums to insure an aging car worth only a few thousand dollars often isn’t cost-effective.
Compare your vehicle’s current value to what you’re paying annually for full-coverage car insurance. As a rule of thumb, if the car is worth less than 10 times what you’re paying in collision and comprehensive premiums, the coverage may not make sense.
Ask about car insurance discounts
Insurance companies offer a variety of discounts that many drivers may not even know about. Contact your insurer to learn what you can do to qualify for discounts, such as bundling your auto and homeowners policies or completing a defensive driving course.
Telematics programs, pay-per-mile insurance for low-mileage drivers, and good student discounts are other common money-saving options. A single conversation with your insurer could reveal substantial savings opportunities you didn’t know existed.
Why car insurance is so expensive FAQs
These frequently asked questions address common concerns drivers have about rising car insurance costs and what they can do to manage their premiums.
High costs stem from inflation, expensive vehicle repairs, rising medical expenses, advanced car technology, supply chain disruptions, and regional factors like weather events, traffic density, and crime rates affecting your area.
Drivers in Maryland, New York, Washington, D.C., Delaware, and South Carolina pay the most for car insurance coverage, on average, according to Insurify data. But you may still be able to obtain affordable coverage by following some of the tips outlined above.
A $200 monthly premium may or may not be normal depending on where you live, your driving history, coverage levels, and vehicle. Take a look at car insurance rates by state to get a sense for where you fall based on where you live.
You can save money on car insurance by comparing quotes regularly, maintaining a clean driving record, raising your deductible, dropping unnecessary coverage on older vehicles, and asking about available discounts your insurer offers.
Yes. Insurers raise rates based on regional trends like increased claims in your area, rising repair and medical costs, weather-related damage, and other external factors beyond your control.
Methodology
Insurify data scientists analyzed more than 190 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 500+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.
Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).
Liability-only premium averages correspond to policies with the following coverage limits:
- Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
- Property damage limits between $10,000 and $50,000
- No additional coverage
- Comprehensive coverage with a $1,000 deductible
- Collision coverage with a $1,000 deductible
Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
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Sources
- Insurance Information Institute. "Trends and Insights: Personal Auto Insurance Rates."
- Insurance Information Institute. "What determines the price of an auto insurance policy?."
- Insurance Information Institute. "8 questions to ask before buying auto insurance."
- Insurance Information Institute. "Auto insurance basics—understanding your coverage."
- Insurance Information Institute. "Understanding your insurance deductibles."
- National Association of Insurance Commissioners. "Credit-Based Insurance Scores."
- Insurance Information Institute. "Why did my auto insurance costs go up even when I didn’t file a claim?."
- Insurance Information Institute. "Background on: Pay-as-you drive auto insurance (telematics)."
- Insurance Information Institute. "How to save money on car insurance."
)
Ben LuthiInsurance and Personal Finance Writer
12+ years in personal finance and insurance writing
Former financial analyst
Ben Luthi has been making insurance and personal finance easy to understand for over a decade. Dedicated to helping readers make informed insurance decisions, Ben’s covered just about every personal finance topic under the sun.
His work has appeared in the Wall Street Journal, Fortune Recommends, Yahoo Finance, Experian, Credit Karma, NerdWallet, and many more. Ben lives near Salt Lake City with his two kids and two cats.
Ashley CoxSenior Managing Editor
7+ years in content creation and management
5+ years in insurance and personal finance content
Ashley is a seasoned personal finance editor who’s produced a variety of digital content, including insurance, credit cards, mortgages, and consumer lending products.
Featured in
Mark FriedlanderSenior Director, Media Relations, Insurance Information Institute
Media relations director for Insurance Information Institute
20+ years in insurance and communications
Impartial, independent expert
As Senior Director, Media Relations, for Insurance Information Institute, Mark serves as the non-profit’s national spokesperson, sharing information and education on a wide array of insurance issues.