Car insurance costs in the U.S. can vary dramatically from one state to another, leaving many drivers feeling the financial pinch.
Recent reports show that as of December 2023, car insurance premiums surged by 20% nationwide—the largest increase since 1976.
This spike has pushed some drivers to consider going uninsured, which can lead to serious financial consequences in the event of an accident.
Certain states, like Florida and Michigan, are notorious for their sky-high rates, often due to no-fault insurance systems and environmental risks.
Factors such as vehicle theft rates, population density, and increased traffic congestion further contribute to these brutal costs.
Understanding which states bear the brunt of these expenses can help drivers navigate their insurance options more effectively and prepare for the financial realities of car ownership.
1: Louisiana
Louisiana tops the list with the highest car insurance costs in the U.S. Residents face an average yearly rate of $2,883 for a 40-year-old driving a Honda Accord LX.
The state saw a significant 14% increase in premiums from 2021 to 2023, costing drivers an extra $348 in 2023 compared to the previous year.
2: Florida
Florida ranks as the second-worst state for car insurance costs, with drivers paying an average of $2,694 annually for a Honda Accord LX. In 2024, residents face a staggering 24% increase compared to last year.
Contributing factors include extreme weather, severe accidents, and high population density, raising overall premiums significantly.
3: California
California drivers face steep car insurance costs, averaging $2,416 annually for a 40-year-old Honda Accord LX. Premiums rose by $306 from 2022 to 2023, largely due to increased accident claims.
Karl Susman, an insurance expert, notes that modern vehicle repair expenses are a significant factor driving these higher rates.
4: Colorado
Coloradans face the fourth-highest car insurance costs in the U.S., with average premiums at $2,337. The state saw a staggering 29% increase between 2021 and 2023.
This surge stems from Colorado’s auto theft rates, the worst in the nation, leading to higher comprehensive coverage claims for stolen vehicles.
5: South Dakota
South Dakota drivers pay an average annual premium of $2,280 for car insurance, reflecting a steep 47% increase from $1,553 the previous year.
This surge is attributed to rising accident rates and increasing healthcare costs, which burden insurance companies when covering medical claims. As more people drive, these factors contribute to the growing financial strain on drivers.
6: Michigan
Michigan’s car insurance premiums are among the highest in the nation, averaging $2,266 for a 40-year-old driving a Honda Accord LX.
Premiums saw a modest 5% increase between 2021 and 2023. A major factor contributing to this high cost is the state’s mandate for unlimited lifetime coverage for catastrophic injuries.
This requirement ensures medical expenses are covered for life after severe accidents, significantly driving up insurance rates.
7: Kentucky
Kentucky drivers face hefty car insurance premiums, averaging $2,228 for a 40-year-old with a Honda Accord LX in 2023.
This figure reflects a $359 increase from the previous year. High auto theft rates and mandated personal injury protection coverage contribute significantly to Kentucky’s soaring insurance costs, making it one of the most expensive states for car insurance.
8: Montana
Montana’s average annual car insurance cost for a 40-year-old driving a Honda Accord LX is $2,193, reflecting a 25% increase from $1,751 in 2022.
Drivers face high accident risks, evidenced by nearly 20 traffic fatalities per 100,000 residents, contributing to exorbitant premiums. Rising repair costs and healthcare expenses further amplify financial burdens on Montana drivers.
9: Washington, DC
Washington, D.C., significantly impacts car insurance costs due to its high population density. Residents paying an average of $2,157 annually for a Honda Accord LX face the nation’s highest premiums outside of Louisiana.
Increased collision risks from crowded streets drive these costs even higher, making informed insurance choices crucial for D.C. drivers.
10: Oklahoma
Oklahoma drivers face an average annual premium of $2,138 for a 40-year-old with a Honda Accord LX, reflecting a 26% increase from 2022.
Lower population density means residents spend more time on the road, raising accident risks. This extended road presence contributes significantly to soaring insurance costs.
11: Delaware
Delaware ranks high for car insurance costs, with premiums averaging $2,063 annually for a 40-year-old driving a Honda Accord LX in 2023. It experienced a 3% drop from 2022, yet remains above average nationwide.
Dense population, high repair prices, and increased accident risks all contribute to costly insurance rates in the state.
12: Rhode Island
Rhode Island drivers face average car insurance costs of $2,061 for a 40-year-old in a Honda Accord LX in 2023. That marks a significant 20% increase, or $344, from 2022.
High population density and busy highways contribute to these skyrocketing premiums, making Rhode Island one of the costliest states for car insurance.
13: Nevada
Surprisingly, Nevada’s car insurance costs are among the highest in the nation. Drivers pay an average premium of $2,361 annually for a 40-year-old with a Honda Accord LX.
Car insurance rates increased by 4% in 2023, primarily due to factors like high accident rates and relaxed alcohol laws contributing to road risks.
14: New Mexico
New Mexico drivers faced significant auto insurance costs in 2022, with average premiums for a 40-year-old driving a Honda Accord LX at $1,516.
In 2023, this figure jumped to $2,049, marking a 35% increase. The prevalence of uninsured drivers and lax penalizations exacerbate these high rates.
15: Texas
Texas drivers face significant car insurance costs, averaging $2,043 annually for a 40-year-old with a Honda Accord LX. It saw a notable 14% rate increase from 2022 to 2023.
Population density contributes to these high premiums, as Texas contains three of the ten largest cities in the U.S. Also, smaller cities with growing populations further amplify the demand for insurance, driving up rates.
Alicia Richards