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