Car insurance costs have been on the rise, leaving drivers searching for ways to save on car ownership costs. In fact, according to a report from Bankrate, the average annual premium of full coverage auto insurance rose to $2,543 in 2024 — up 26% from the previous year.
CNBC Select breaks down the report's findings, explaining which states have experienced the highest spike in car insurance costs — and what you can do to pay less.
Where did full coverage insurance costs increase the most?
Bankrate shared with CNBC Select that the following states have seen the largest change in full coverage auto insurance premiums since 2023:
- Missouri: $858 ($1,943 to $2,801) – 44.16%
- New Jersey: $801 ($1,754 to $2,555) – 45.69%
- Rhode Island: $797 ($1,886 to $2,683) – 42.29%
- Colorado: $781 ($2,121 to $2,902) – 36.83%
- Nevada: $771 ($2,779 to $3,549) – 27.73%
The national average of how much of their income a driver spends on full auto coverage is 3.41%. But in many states, drivers devote far more of their income towards car insurance. For instance, Floridian drivers spend 5.69% of their income on full coverage auto insurance, Michigan drivers spend 5.01% of their income, and those in Nevada — 4.91%. Louisiana, however, is the state where drivers spend the most of their income, putting 6.53% toward full coverage insurance.
When auto insurance costs become a problem for your budget, a knee-jerk reaction may be to switch to minimum coverage. After all, the savings can be significant. According to the report, the national average cost for full coverage car insurance is $212 per month, compared to just $62 per month for minimum coverage.
Still, minimum coverage can leave you financially vulnerable if you're found at fault in an accident. It's best to get the coverage you need and explore other money-saving tactics.
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How you can save on auto insurance
To bring down car insurance costs, you want to make sure you're getting the best deal you can. That might require switching car insurance providers. Call around and gather some quotes to see if a different company might offer lower rates for the amount of coverage you need.
CNBC Select recommends Geico which offers highly rated customer service as well as competitive rates. According to our research, it also provides the most affordable full coverage of the companies we analyzed for our list of the best cheap auto insurance companies.
Geico Auto Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
Geico coverage and services are available in all 50 states and the District of Columbia and there are 16 different types of discounts available. In addition to the standard coverage options, Geico offers various optional add-ons, such as emergency roadside assistance, rental car reimbursement and mechanical breakdown insurance.
Terms apply.
Read our Geico Auto Insurance review.
Another affordable provider with high customer satisfaction is Amica. Additionally, you can score one or more of its 18 discounts.
Amica Auto Insurance
Cost
The best way to estimate your costs is to request a quote
Policy highlights
Amica offers a variety of auto insurance policies to fit your coverage needs. The company also offers a total of 18 discounts, including discounts for bundling and for students.
App available
Yes
You can also consider bundling insurance policies to potentially save more by sticking with one provider for different types of insurance.
What affects auto insurance rate
If you're looking for other opportunities to lower your car insurance premiums, the following factors play a big role in determining what you pay according to the Insurance Information Institute:
- Your credit score. In many states, insurance providers can consider your credit history when they determine your auto insurance rates. For that reason, improving your credit score can have a positive effect on your car insurance bills.
- Your driving record. You want to avoid high-risk driving behavior and ensure you avoid any lapse in coverage. If you already have DUIs, speeding tickets or other negative marks on your driving record, it's especially helpful to shop around for a provider that can give you a lower rate. Our list of the best car insurance for high-risk drivers may be a good place to start.
- Your vehicle. What you drive also matters. According to Allstate, some types of cars are more expensive to insure. On the other hand, certain built-in security features can qualify you for a car insurance discount.
- Your driving habits. The more you drive, the higher you can expect your premiums to be.
- Your demographic information. Your gender and age are also considered when an insurance provider determines your premiums.
FAQs
Why is a newer car more expensive to insure?
A newer car is usually more expensive to insure because it typically has a higher value than a used car.
Is it normal for car insurance to increase every year?
It's normal for car insurance rates to increase every year even if you haven't changed your policy or filed any claims. This can happen due to multiple factors, from inflation to an increase in claims in your area.
Does your credit score affect car insurance rates?
Yes, in many states your credit score can affect your car insurance rate.
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Bottom line
Car insurance prices are on the rise. Some states have experienced average premium increases as high as 46% on full coverage. These numbers show how essential it is to spend some time shopping around for insurance products. While there are steps you can take to bring the costs down, switching providers may be the quickest solution.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal finance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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