What states have the highest, lowest auto insurance rates?
What states have the highest, lowest auto insurance rates?
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The average auto insurance rate in the U.S. is expected to go up by 7.5% in 2025, according to a new analysis by MarketWatch Guides.
The hikes will add an average $182 to the average annual full-coverage premium nationwide raising it to $2,615 from $2,433. Drivers in several states face increases of $200 or more.
With the average American worker making $68,000, auto insurance will consume nearly 3.9% of annual income and significantly more in states with lower median incomes, MarketWatch Guides said.
MarketWatch Guides calculated average auto insurance rates using data from Quadrant Information Services for a 35-year-old single driver with a clean driving record and good credit who drives a 2023 Toyota Camry.
Why are auto insurance premiums going up?
The auto insurance industry faced headwinds a few years ago in 2022 and 2023, said Daniel Robinson, senior auto insurance research and writer at MarketWatch Guides. There was increased frequency and severity of natural disasters, like floods, wildfires, and hurricanes, he said.
"These disasters led to higher-than-expected claims, straining insurers' bottom lines," Robinson told USA TODAY. Insurance premiums have been on a steady climb since dramatic pandemic-era disruptions spurred rate hikes, but have slowed to smaller increases, he said.
A shortage of vehicle parts and skilled auto repair workers that emerged during the pandemic era when there were supply chain snarls still plays a role in increased repair costs today, Robinson said. Insurers unfortunately took the brunt of those repair costs, which required them to raise premiums to stay financially stable.
"We've also seen prices of cars in general rise in recent years due to inflation and increased demand. This adds another compounding effect," he said.
Tariffs, which have led to an increase in the cost of imported car parts, also make repairing cars more expensive and are passed on in higher insurance premiums, Robinson said.
What states have the highest auto premiums?
Drivers in Louisiana pay the most, with an average of $3,481 per year or $290 a month for a full-coverage policy. Louisiana also has one of the highest rates of highway fatalities, with 19.7 deaths per 100,000 residents, according to an Insurance Institute for Highway Safety analysis of data from the U.S. Department of Transportation's Fatality Analysis Reporting System. The national average is 12.8 deaths per 100,000 residents.
Vermont drivers have the lowest average premium at $1,624 per year on average or $135 a month. The state has a below-average rate of highway fatalities at 11.7 deaths per 100,000 residents, according to MarketWatch Guides.
More money: Add auto insurance to the list of things increasing in price with Trump's tariffs
Where is car insurance increasing the most?
MarketWatch Guides' analysis found the most dramatic insurance premium price hike was in Washington, D.C., where premiums rose by 20% from $2,684 to $3,209.
Maine and South Carolina also saw big increases of 10%. In South Carolina, a 10% raise in premiums is $221 more in costs per year, the second-highest dollar amount increase after Washington, D.C. ($525).
Nevada had the biggest decreases in premiums. Nevada's average premium fell from $3,549 to $2,889. That's a 19% decrease and a $660 difference.
Even though Louisiana is the most expensive state for auto premiums, it had the second-highest decrease in annual premiums in terms of dollar amounts and as a percentage. Premiums in Louisiana fell by 14% in 2025 or $576.
Betty Lin-Fisher is a consumer reporter for USA TODAY. Reach her at blinfisher@USATODAY.com or follow her on X, Facebook or Instagram @blinfisher and @blinfisher.bsky.social on Bluesky. Sign up for our free The Daily Money newsletter, which will include consumer news on Fridays, here.
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