In this article, we will look at the 15 states with the cheapest car insurance in the US. If you want to skip our comprehensive analysis of the car insurance market in the US, you can go directly to 5 States with the Cheapest Car Insurance In The US.
Car insurance operates as a mutual agreement between you and an insurance company. In this arrangement, you commit to paying premiums, and in return, the insurance company protects against financial losses resulting from accidents or damage to your vehicle. By paying a premium, you secure an agreement with the insurance company, and they commit to covering your losses as specified in your policy. These policies are tailored to individual needs and budgets, allowing you to customize coverage amounts accordingly. Typically, policy terms span six or twelve months and are renewable. The insurance provider will inform you when it's time to renew your policy and submit another premium payment.
In most US states, it's a legal requirement to have car insurance. If you cause a car accident, the auto liability coverage mandated by your insurance helps cover certain expenses. This includes the other party's medical bills and the repair or replacement of their vehicle or property damaged in the accident. Additionally, this coverage assists in paying for your legal fees if you end up in court due to the accident.
The Benefits of Getting Car Insurance
Many drivers get car insurance because it's a legal requirement, but it's not just about meeting the minimum coverage. There are several reasons to consider having car insurance. It serves as a financial safeguard for you and your family, preventing significant expenses. By investing a modest amount now, you can avoid hefty costs in the future. Quality car insurance provides protection for you, your family, passengers, and other drivers. In the event of an accident, having the right coverage ensures that you're financially prepared for property damage or bodily injury expenses. Dealing with the aftermath of a car accident can be time-consuming and tiresome. With proper coverage, you can sidestep the hassle of negotiating with other parties involved, managing repair or replacement costs for your vehicle, and handling various headaches that may arise. A comprehensive auto insurance policy not only assists with towing, repairs, and replacements for your vehicle but also covers damages to other drivers.
Surge in Car Insurance Rates
This year, auto insurance rates have seen another increase, and an expert attributes it to a combination of factors, including the higher costs of cars and parts, as well as a growing number of accidents. Scott Holeman, a spokesperson for the Insurance Information Institute, appeared in an interview on 25News where he pointed out that insurance companies incur higher expenses not only in repairing vehicles but also in dealing with legal actions arising from car accidents. Speaking on the matter, Holeman stated, “That litigation has a direct impact on insurance premiums. There are these high-dollar rewards in court cases. That’s going to be passed along to consumers.” He also highlighted that the prevalence of more technologically advanced cars on the roads is contributing to the overall increase in insurance prices. According to Holeman, insurance companies are incurring $1.12 in expenses for every $1 of premium written, essentially paying out more than they are taking in. He noted that the persistently high rates of accidents will likely keep insurance rates elevated in the foreseeable future.
According to auto insurance processing company CCC Intelligent Solutions, the average repair cost for a traditional vehicle currently stands at $4,437. For electric vehicles, the average repair expense is 49% higher at $6,618. This increase is attributed to the additional technological components in electric vehicles and the specialized handling required for their electric powertrains. Insurers have responded to the surge in repair costs, witnessing a 64% rise in the average collision insurance claim from 2018 to 2022, reaching $5,992 according to the Insurance Information Institute. To counteract the escalating repair expenses, insurance providers have significantly increased drivers' premiums. Data from the US Bureau of Labor Statistics reveals that the cost of auto insurance in the United States experienced a notable increase of over 20% in 2023, marking the most substantial annual surge since 1976.
Top Companies Shaping the US Car Insurance Market
In the realm of US motor insurance, standout players include The Progressive Corporation (NYSE:PGR), Travelers Companies, Inc. (NYSE:TRV), and The Allstate Corporation (NYSE:ALL). These companies have firmly established themselves as key influencers in the industry, contributing significantly to the dynamic and competitive landscape of motor insurance in the United States.
The Progressive Corporation (NYSE:PGR), one of the leading US insurance holding companies, shared positive news about its performance in the fourth quarter of 2023. The Progressive Corporation, in its latest earnings report on January 24, 2024, exceeded expectations with an EPS Normalized Actual of $2.97, surpassing estimates by $0.55. Additionally, the EPS GAAP Actual stood at $3.37, surpassing predictions by $0.79, and the company reported a revenue of $15.13 billion.
Travelers Companies Inc. (NYSE:TRV) had a strong finish to the fourth quarter of 2023, especially in the property casualty insurance sector. Travelers Companies Inc. (NYSE:TRV) reported a net income of $1.626 billion. This was driven by a substantial increase in premiums, which went up by 13% and almost reached the $10 billion mark. Providing a more detailed look at the earnings, Travelers Companies Inc. (NYSE: TRV) disclosed that the core income per share reached $7.01.
Meanwhile, in December, The Allstate Corporation (NYSE:ALL) raised auto insurance rates by 16.5% across 15 locations, leading to an overall premium impact of 5%. This figure includes the approved rate increases by the Departments of Insurance in California, New York, and New Jersey. Notably, The Allstate Corporation (NYSE:ALL)'s estimated losses from catastrophic events in December were below the reporting threshold of $150 million. For the entire fourth quarter, the pre-tax total for catastrophe losses was $68 million.
Let's now take a look at the 15 states with the cheapest car insurance in the US.
15 States with the Cheapest Car Insurance In The US
Our Methodology
This article provides a compilation of the 15 states with the cheapest car insurance in the US. Our rankings are based on data gathered from Compare.com, utilizing information from their most recent dataset, updated as of 2024. Below, you'll see our list of the 15 states where car insurance is the least expensive, which are ranked in descending order of their average full coverage insurance costs, primarily, and average liability insurance costs, secondarily.
15 States with the Cheapest Car Insurance In The US
15. Minnesota
Average Full Coverage Insurance Cost: $201
Average Liability Insurance Cost: $92
Located in the Midwestern region of the United States, Minnesota shares its border with Canada and is graced by the presence of Lake Superior, the largest among the Great Lakes. Securing the 15th position in our compilation of the 15 states offering the most economical car insurance in the U.S., Minnesota boasts an average monthly rate of $201 for comprehensive insurance. Concurrently, the average monthly cost for liability insurance in the state stands at $92.
14. Tennessee
Average Full Coverage Insurance Cost: $201
Average Liability Insurance Cost: $87
Ranking 14th in our list of the 15 states with the cheapest car insurance in the US is Tennessee. Tennessee, situated in the Southeastern region of the United States, is a landlocked state. It ranks as the 36th largest by area and the 15th most populous among the 50 states. Known for its diverse terrain and landforms, Tennessee showcases a variety of geographical features from east to west.
As of 2024, the average full coverage expense for car insurance in Tennessee stands at $201 on average.
13. Nebraska
Average Full Coverage Insurance Cost: $198
Average Liability Insurance Cost: $77
Ranking 13th in our list of the 15 states with the cheapest car insurance in the US is Nebraska. Situated in the Midwestern United States, Nebraska shares its borders with South Dakota to the north, Iowa to the east, and Missouri to the south. Recognized for its robust agriculture, notably corn production, Nebraska boasts a wealth of captivating and historically significant destinations that are well worth exploring.
As of the latest data available in 2024, the average full coverage expense for vehicle insurance in the state of Nebraska stands at $198.
12. Washington, DC
Average Full Coverage Insurance Cost: $197
Average Liability Insurance Cost: $105
Washington, DC, the U.S. capital, is a compact city on the Potomac River, bordering the states of Maryland and Virginia. As of 2024, the average monthly rate for full coverage insurance is $197 in Washington DC. The average monthly rate for liability insurance in the state of Washington is $105.
11. North Carolina
Average Full Coverage Insurance Cost: $184
Average Liability Insurance Cost: $78
North Carolina is known for its vibrant arts and culture scene, its pioneering contributions to aviation, and the breathtaking state parks adorned with majestic mountains. Located in the southern region, this state is characterized by warm and welcoming communities, delectable cuisine, and enchanting natural landscapes. Additionally, North Carolina holds a place of pride as the birthplace of iconic brands, with PepsiCo, Inc. (NYSE:PEP) and Krispy Kreme Doughnuts Inc. (NYSE:KKD) among the noteworthy names that originated within its borders.
As of 2024, the average full coverage cost of car insurance in North Carolina is documented at $184.
10. Wyoming
Average Full Coverage Insurance Cost: $180
Average Liability Insurance Cost: $49
Wyoming landed in the 10th spot in our list of the 15 states with the cheapest car insurance in the US. The name "Wyoming" finds its roots in the Native American term "mecheweamiing," translating to "at the big plains." This state is known for its profound indigenous tales, captivating natural landscapes, and iconic National Parks such as Yellowstone and Grand Teton. Wyoming boasts one of the nation's sparsest population densities. It is celebrated for its association with bull riding, and cowboy culture, and serving as the residence to some of the world's most splendid rangelands.
As of 2024, the average full coverage for auto insurance in Wyoming is recorded at $180.
9. Indiana
Average Full Coverage Insurance Cost: $173
Average Liability Insurance Cost: $75
Indiana bagged the 8th spot in our list of the 15 states with the cheapest car insurance in the US. Established as the 19th state in 1816, Indiana holds a prominent position as a major producer of corn, soybeans, poultry, and popcorn, earning the 10th spot in the United States for agricultural sales.
According to the latest available data in 2024, the average full coverage insurance in Indiana is $173.
8. South Dakota
Average Full Coverage Insurance Cost: $173
Average Liability Insurance Cost: $53
Ranking 9th in our list of the 15 states with the cheapest car insurance in the US is South Dakota. Situated in the upper middle of the United States, South Dakota is often designated as "the land of infinite variety." This variety is evident in various aspects, ranging from the state's weather and scenery to its economy, state symbols, and notable individuals. Ranking 16th in size among the 50 states, South Dakota boasts a robust agricultural foundation, standing as the largest industry in the state. It consistently secures positions in the top 10 states for the production of hay, sunflowers, rye, honey, soybeans, corn, wheat, and cattle. Additionally, tourism plays a significant role, contributing approximately $2 billion annually to the state's economy.
The average full coverage cost of car insurance in South Dakota stands at $173, based on the most recent data.
7. Ohio
Average Full Coverage Insurance Cost: $172
Average Liability Insurance Cost: $81
Ohio is located in the Midwestern region of the United States. Positioned as the 7th entry on our list of the 15 states with the cheapest car insurance in the US, Ohio presents an average monthly rate of $172 for comprehensive insurance. Meanwhile, the average monthly cost for liability insurance in the state stands at $81.
6. Idaho
Average Full Coverage Insurance Cost: $162
Average Liability Insurance Cost: $72
Idaho is a state nestled in the Mountain West subregion of the United States. In 2024, Idaho showcases an average monthly cost of $162 for comprehensive insurance, while liability insurance holds an average monthly rate of $72. This positions Idaho among the 15 states with the cheapest car insurance in the US.
