Revealed - the most and least expensive states for car insurance in 2022

Revealed - the most and least expensive states for car insurance in 2022 | Insurance Business America

Revealed - the most and least expensive states for car insurance in 2022

The true cost of car insurance is reflected in the percentage of their income drivers allocate for auto coverage each year and not on how much they spend on premiums, according to financial services firm Bankrate.

But since average income between states varies significantly – often by up to tens of thousands of dollars, the company used this metric to analyze 2022 auto insurance rates in all zip codes and carriers across the country’s 50 states to better demonstrate the impact of premiums on motorists’ overall budgets.

According to Bankrate’s study, the average cost of car insurance in the US takes up 2.57% of a driver’s annual income, which is equivalent to $1,771 annually. Motorists spend a much higher or lower percentage than average, depending on the state they live in, with the difference between the most and least expensive premiums at $2,120.

“Louisiana drivers spend the highest proportion of their money on auto insurance, at 5.26% of their income, followed by Florida at 4.42%,” the firm noted in its analysis. “One reason these states may experience high true costs is that hurricanes and flooding are common, which may drive up insurance rates. Paired with the relatively low median incomes in both states, residents end up putting a significant portion of their budget toward car insurance.”

Read more: Revealed: Most and least expensive places in the US for car insurance

What other factors have the biggest impact on car insurance rates in 2022?

A driver’s geographic location, however, is not the only factor that has a huge impact on car insurance rates. According to the report, specific “life events” can affect premium prices and the proportion of income a driver spends on auto insurance. These include:

1. Credit rating

Car insurance companies in most states – with the exception of California, Hawaii, Massachusetts, and Michigan – use credit-based insurance scores to help determine premiums as these providers often believe that policyholders with high ratings tend to file fewer claims than those with lower credit scores.

The report reveals that motorists with a good credit rating pay $1,146 less per year for auto insurance than those with a poor credit history. In Wisconsin, drivers experience a whopping increase of $4,128 – the highest of any state – when their scores go from good to poor. At the other end of the spectrum are North Carolina motorists who encountered just a $351 rise in premiums under similar circumstances.

2. Vehicle make and model

Sedans are typically cheaper to insure compared to coupes or SUVs, while premiums for luxury vehicles, sports cars, and cars equipped with advanced technology will likely be much higher. According to the report, full-coverage car insurance for a luxury BMW330i costs $747 more per year than a Ford F-150 pickup truck.

Read more: Revealed – the most and least expensive cars to insure in the US

3. Driving history

Auto insurers view a poor driving record as an indication that a motorist is more likely to file a claim in the future. As a result, at-fault accidents can drive up rates considerably. In California, for instance, drivers see an average annual rate increase of $1,436 after an at-fault accident, the highest of any state. Los Angeles drivers, meanwhile, experience an average jump of $1,636 per year after causing an accident, the highest of any metro area included in the analysis.

The study also found that of all incidents, getting caught driving under the influence (DUI) pushes up premiums the most. Drivers with a DUI record pay an average of $1,650 more per year for their full-coverage insurance than the national average, according to the report.

4. Teens

Adding a teen to a car insurance policy can cause one of the most significant rate increases for the average driver, the study noted. Married couples with a teenage child on their policy pay an average of $3,852, $1,998 more than the national average.

Read more: Ten ways motorists can save on auto insurance premiums

Which states do drivers pay the most for car insurance?

To find out which states have the most and least expensive car insurance premiums, Bankrate gathered data from Quadrant Information Services and used this in its analysis. The quoted rates were then based on a 40-year-old male and female driver of a 2020 Toyota Camry who commutes five days a week and covers 12,000 miles annually. The hypothetical motorist also has a clean driving record, good credit score, and the following full-coverage limits: 

  • $100,000 bodily injury liability per person
  • $300,000 bodily injury liability per accident
  • $50,000 property damage liability per accident
  • $100,000 uninsured motorist bodily injury per person
  • $300,000 uninsured motorist bodily injury per accident
  • $500 collision deductible
  • $500 comprehensive deductible

“These are sample rates and should only be used for comparative purposes,” the company added.

Here are the top 10 states with the most expensive car insurance rates, according to the report.

In which states do drivers pay the most for car insurance?

1. Louisiana

Average annual full-coverage premium: $2,864

Percentage of income spent on car insurance: 5.26%

Percentage difference from national average: 2.69%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$2,552

$5,416

Received a speeding ticket

$607

$3,471

Caused a car accident

$1,078

$3,942

Had a lapse in auto insurance coverage

$211

$3,075

Convicted of a DUI

$2,666

$5,530

Insured a teenage driver

$3,410

$6,274

Source: The True Cost of Auto Insurance in 2022, Bankrate

2. Florida

Average annual full-coverage premium: $2,762

Percentage of income spent on car insurance: 4.42%

Percentage difference from national average: 1.85%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$2,715

$5,477

Received a speeding ticket

$514

$3,276

Caused a car accident

$1,046

$3,808

Had a lapse in auto insurance coverage

$448

$3,210

Convicted of a DUI

$1,695

$4,457

Insured a teenage driver

$3,043

$5,805

Source: The True Cost of Auto Insurance in 2022, Bankrate

3. New York

Average annual full-coverage premium: $2,996

Percentage of income spent on car insurance: 3.87%

Percentage difference from national average: 1.30%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$3,839

$6,835

Received a speeding ticket

$245

$3,241

Caused a car accident

$243

$3,239

Had a lapse in auto insurance coverage

$209

$3,205

Convicted of a DUI

$2,310

$5,306

Insured a teenage driver

$3,281

$6,277

Source: The True Cost of Auto Insurance in 2022, Bankrate

4. Michigan

Average annual full-coverage premium: $2,345  

Percentage of income spent on car insurance: 3.75%

Percentage difference from national average: 1.18%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$3,551

$5,896

Received a speeding ticket

$452

$2,797

Caused a car accident

$1,088

$3,433

Had a lapse in auto insurance coverage

$112

$2,457

Convicted of a DUI

$3,896

$6,241

Insured a teenage driver

$3,071

$5,416

Source: The True Cost of Auto Insurance in 2022, Bankrate

5. Nevada

Average annual full-coverage premium: $2,426                  

Percentage of income spent on car insurance: 3.74%

Percentage difference from national average: 1.17%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$1,079

$3,505

Received a speeding ticket

$509

$2,935

Caused a car accident

$962

$3,388

Had a lapse in auto insurance coverage

$246

$2,672

Convicted of a DUI

$1,516

$3,942

Insured a teenage driver

$2,875

$5,301

Source: The True Cost of Auto Insurance in 2022, Bankrate

6. Kentucky

Average annual full-coverage premium: $1,954                                  

Percentage of income spent on car insurance: 3.49%

Percentage difference from national average: 0.92%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$1,618

$3,572

Received a speeding ticket

$453

$2,407

Caused a car accident

$886

$2,840

Had a lapse in auto insurance coverage

$238

$2,192

Convicted of a DUI

$1,585

$3,539

Insured a teenage driver

$2,185

$4,139

Source: The True Cost of Auto Insurance in 2022, Bankrate

7. Mississippi

Average annual full-coverage premium: $1,701                                                  

Percentage of income spent on car insurance: 3.46%

Percentage difference from national average: 0.89%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$1,381

$3,082

Received a speeding ticket

$350

$2,051

Caused a car accident

$841

$2,542

Had a lapse in auto insurance coverage

$212

$1,913

Convicted of a DUI

$1,088

$2,789

Insured a teenage driver

$1,461

$3,162

Source: The True Cost of Auto Insurance in 2022, Bankrate

8. Oklahoma

Average annual full-coverage premium: $1,902                                                                  

Percentage of income spent on car insurance: 3.43%

Percentage difference from national average: 0.86%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$1,477

$3,379

Received a speeding ticket

$340

$2,242

Caused a car accident

$672

$2,574

Had a lapse in auto insurance coverage

$178

$2,080

Convicted of a DUI

$931

$2,833

Insured a teenage driver

$1,795

$3,697

Source: The True Cost of Auto Insurance in 2022, Bankrate

9. Arkansas

Average annual full-coverage premium: $1,806                                                                  

Percentage of income spent on car insurance: 3.34%

Percentage difference from national average: 0.83%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$1,840

$3,646

Received a speeding ticket

$376

$2,182

Caused a car accident

$729

$2,535

Had a lapse in auto insurance coverage

$255

$2,061

Convicted of a DUI

$1,295

$3,101

Insured a teenage driver

$1,978

$3,784

Source: The True Cost of Auto Insurance in 2022, Bankrate

10. Alabama

Average annual full-coverage premium: $1,760                                                                  

Percentage of income spent on car insurance: 3.14%

Percentage difference from national average: 0.57%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$1,357

$3,117

Received a speeding ticket

$350

$2,110

Caused a car accident

$832

$2,592

Had a lapse in auto insurance coverage

$189

$1,949

Convicted of a DUI

$1,415

$3,175

Insured a teenage driver

$2,123

$3,883

Source: The True Cost of Auto Insurance in 2022, Bankrate

Read more: Top 10 car insurance providers in the US in 2022

In which states do drivers pay the least for car insurance?

Meanwhile, these are the top 10 states where motorists pay the least auto insurance in proportion to their incomes.

1. Hawaii

Average annual full-coverage premium: $1,206                                                                  

Percentage of income spent on car insurance: 1.41%

Percentage difference from national average: -1.16%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$0

$1,206

Received a speeding ticket

$119

$1,325

Caused a car accident

$428

$1,634

Had a lapse in auto insurance coverage

$88

$1,294

Convicted of a DUI

$3,622

$4,828

Insured a teenage driver

$53

$1,259

Source: The True Cost of Auto Insurance in 2022, Bankrate

2. Maine

Average annual full-coverage premium: $876                                                                      

Percentage of income spent on car insurance: 1.44%

Percentage difference from national average: -1.13%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$653

$1,529

Received a speeding ticket

$176

$1,052

Caused a car accident

$366

$1,242

Had a lapse in auto insurance coverage

$175

$1,051

Convicted of a DUI

$701

$1,577

Insured a teenage driver

$1,080

$1,956

Source: The True Cost of Auto Insurance in 2022, Bankrate

3. Massachusetts

Average annual full-coverage premium: $1,296                                                                  

Percentage of income spent on car insurance: 1.45%

Percentage difference from national average: -1.12%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$0

$1,297

Received a speeding ticket

$420

$1,716

Caused a car accident

$873

$2,169

Had a lapse in auto insurance coverage

$132

$1,428

Convicted of a DUI

$1,169

$2,465

Insured a teenage driver

$1,892

$3,188

Source: The True Cost of Auto Insurance in 2022, Bankrate

4. Virginia

Average annual full-coverage premium: $1,340                                                                  

Percentage of income spent on car insurance: 1.46%

Percentage difference from national average: -1.11%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$1,004

$2,344

Received a speeding ticket

$284

$1,624

Caused a car accident

$517

$1,857

Had a lapse in auto insurance coverage

$163

$1,503

Convicted of a DUI

$1,243

$2,583

Insured a teenage driver

$1,602

$2,942

Source: The True Cost of Auto Insurance in 2022, Bankrate

 

5. New Hampshire

Average annual full-coverage premium: $1,182                                                                  

Percentage of income spent on car insurance: 1.47%

Percentage difference from national average: -1.10%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$1,020

$2,202

Received a speeding ticket

$239

$1,421

Caused a car accident

$514

$1,696

Had a lapse in auto insurance coverage

$128

$1,310

Convicted of a DUI

$715

$1,897

Insured a teenage driver

$1,259

$2,441

Source: The True Cost of Auto Insurance in 2022, Bankrate

6. Vermont

Average annual full-coverage premium: $1,000                                                                  

Percentage of income spent on car insurance: 1.48%

Percentage difference from national average: -1.09%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$674

$1,674

Received a speeding ticket

$116

$1,116

Caused a car accident

$274

$1,274

Had a lapse in auto insurance coverage

$69

$1,069

Convicted of a DUI

$1,043

$2,043

Insured a teenage driver

$1,504

$2,504

Source: The True Cost of Auto Insurance in 2022, Bankrate

7. Washington

Average annual full-coverage premium: $1,313                                                                  

Percentage of income spent on car insurance: 1.60%

Percentage difference from national average: -0.97%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$53

$1,366

Received a speeding ticket

$261

$1,574

Caused a car accident

$625

$1,938

Had a lapse in auto insurance coverage

$182

$1,495

Convicted of a DUI

$1,072

$2,385

Insured a teenage driver

$1,738

$3,051

Source: The True Cost of Auto Insurance in 2022, Bankrate

8. Idaho

Average annual full-coverage premium: $1,065                                                                                  

Percentage of income spent on car insurance: 1.68%

Percentage difference from national average: -0.89%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$690

$1,755

Received a speeding ticket

$190

$1,255

Caused a car accident

$396

$1,461

Had a lapse in auto insurance coverage

$185

$1,250

Convicted of a DUI

$691

$1,756

Insured a teenage driver

$1,189

$2,254

Source: The True Cost of Auto Insurance in 2022, Bankrate

9. Utah

Average annual full-coverage premium: $1,449                                                                                  

Percentage of income spent on car insurance: 1.85%

Percentage difference from national average: -0.72%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$1,102

$2,551

Received a speeding ticket

$343

$1,792

Caused a car accident

$702

$2,151

Had a lapse in auto insurance coverage

$256

$1,705

Convicted of a DUI

$1,299

$2,748

Insured a teenage driver

$2,119

$3,568

Source: The True Cost of Auto Insurance in 2022, Bankrate

10. Wisconsin

Average annual full-coverage premium: $1,249                                                                                                  

Percentage of income spent on car insurance: 1.87%

Percentage difference from national average: -0.70%

Life events

Added cost

Annual premium

Credit score decreased from ‘good’ to ‘poor’

$4,128

$5,377

Received a speeding ticket

$213

$1,462

Caused a car accident

$418

$1,667

Had a lapse in auto insurance coverage

$156

$1,405

Convicted of a DUI

$948

$2,197

Insured a teenage driver

$1,537

$2,786

Source: Bankrate, The True Cost of Auto Insurance in 2022