Average insurance premiums in 2023

Introduction

Vehicle insurance is pivotal in safeguarding your valuable vehicular assets and providing peace of mind on the pavement. As such, it is crucial to approach your insurance choices with diligence and thorough research. By exploring and comparing rates, you can balance comprehensive coverage and affordability harmoniously. 

However, coverage rates are highly contingent on geography, which begs a number of questions: 

1. Which regions in the United States and Canada have the highest car insurance premiums? 
2. How do car insurance premium rates vary based on different driver profiles? 
3. Are there discrepancies between states or cities, and why might that be? 

Assessing car insurance barometers across North America can comprehensively answer these inquiries, offer insights into the factors influencing insurance rates, and provide info that might help inform decisions about coverage.

Average vehicle insurance premiums in the U.S. 

In 2023, the average cost of car insurance in the U.S. is $179 per month. In some states, this represents nearly a 15% increase over the past year. Despite this significant rise, they are still expected to increase another 8.4% over the remainder of 2023, thereby outpacing current inflation at 4.9%  – this is, in short, one of the largest increases in over a decade.[1]  

Let’s examine the highest and lowest rates in the United States. 

Here are the cheapest states for full coverage auto insurance:

• Maine: $1,323 (yearly), $110 (monthly)
• Idaho: $1,349 (yearly), $112 (monthly)
• Vermont: $1,376 (yearly), $115 (monthly)
• Massachusetts: $1,394 (yearly), $116 (monthly)
• Ohio: $1,423 (yearly), $119 (monthly)

These are the most expensive states for full coverage auto insurance:

• Florida: $3,605 (yearly), $300 (monthly)
• Louisiana: $3,399 (yearly), $283 (monthly)
• Kentucky: $3,357 (yearly), $280 (monthly)
• Rhode Island: $3,300 (yearly), $275 (monthly)
• Michigan: $3,229 (yearly), $269 (monthly)

Here are the remaining states and their unique average insurance rates for 2023: 

• Alabama: $2,269 (yearly), $189 (monthly)
• Alaska: $1,955 (yearly), $163 (monthly)
• Arizona: $2,155 (yearly), $180 (monthly)
• Arkansas: $2,160 (yearly), $180 (monthly)
• California: $1,659 (yearly), $138 (monthly)
• Colorado: $2,698 (yearly), $225 (monthly)
• Connecticut: $2,604 (yearly), $217 (monthly)
• Delaware: $2,601 (yearly), $217 (monthly)
• Georgia: $2,509 (yearly), $209 (monthly)
• Hawaii: $1,631 (yearly), $136 (monthly)
• Illinois: $1,747 (yearly), $146 (monthly)
• Indiana: $1,433 (yearly), $119 (monthly)
• Iowa: $1,596 (yearly), $133 (monthly)
• Kansas: $2,290 (yearly), $191 (monthly)
• Maryland: $2,998 (yearly), $250 (monthly)
• Minnesota: $1,931 (yearly), $161 (monthly)
• Mississippi: $1,950 (yearly), $162 (monthly)
• Missouri: $2,706 (yearly), $225 (monthly)
• Montana: $2,831 (yearly), $236 (monthly)
• Nebraska: $1,788 (yearly), $149 (monthly)
• Nevada: $3,058 (yearly), $255 (monthly)
• New Hampshire: $1,557 (yearly), $130 (monthly)
• New Jersey: $2,809 (yearly), $234 (monthly)
• New Mexico: $2,127 (yearly), $177 (monthly)
• New York: $2,600 (yearly), $217 (monthly)
• North Carolina: $1,487 (yearly), $124 (monthly)
• North Dakota: $1,869 (yearly), $156 (monthly)
• Oklahoma: $2,438 (yearly), $203 (monthly)
• Oregon: $1,888 (yearly), $157 (monthly)
• Pennsylvania: $2,266 (yearly), $189 (monthly)
• South Carolina: $2,715 (yearly), $226 (monthly)
• South Dakota: $1,593 (yearly), $133 (monthly)
• Tennessee: $1,997 (yearly), $166 (monthly)
• Texas: $2,398 (yearly), $200 (monthly)
• Utah: $2,240 (yearly), $187 (monthly)
• Virginia: $1,922 (yearly), $160 (monthly)
• Washington: $1,759 (yearly), $146 (monthly)
• Washington, D.C.: $2,260 (yearly), $188 (monthly)
• West Virginia: $2,075 (yearly), $173 (monthly)
• Wisconsin: $1,683 (yearly), $140 (monthly)
• Wyoming: $1,553 (yearly), $129 (monthly)

In this dataset,[2] the information pertains to a driver in their mid-30s with a good driving record, as well as a reasonable credit score – in other words, it excludes a number of factors we will return to in a later section.

Average vehicle insurance premiums in Canada 

When exploring the landscape of vehicle insurance premiums across Canada, certain provinces stand out with their higher average rates compared to the national average. Among these provinces are Ontario, Alberta, and British Columbia. Various factors contribute to this divergence, including a larger population, a higher frequency of accidents, and an elevated incidence of insurance fraud. 

Notably, Ontario has persistently occupied a prominent position among the provinces with the highest premiums, largely attributed to its densely populated cities and intricate insurance market. In 2023 alone, Ontario auto insurance has risen by 12%.[3] On the other end of the spectrum, provinces such as Quebec, Newfoundland, Labrador, and Prince Edward Island typically boast average premiums lower than the national average. These provinces benefit from lower population densities, fewer accidents, and more fiercely competitive insurance markets. 

Here is a full list of premiums by province:[4]

• Alberta: $3,151 (yearly), $262 (monthly)
• Nova Scotia: $2,491 (yearly), $207 (monthly)
• Ontario: $2,299 (yearly), $192 (monthly)
• New Brunswick: $2,187 (yearly), $183 (monthly)
• Newfoundland: $2,162 (yearly), $180 (monthly)
• BC: $1,775 (yearly), $148 (monthly)
• PEI: $1,703 (yearly), $142 (monthly)
• Manitoba: $1,373 (yearly), $114 (monthly)
• Saskatchewan: $1,249 (yearly), $104 (monthly)

Factors shaping car insurance rates

To understand the underlying dynamics behind these insurance premiums, examining the factors contributing to their variations is important. Population density, traffic congestion, accident rates, and state-specific regulations are pivotal in determining insurance costs. By understanding these factors, drivers gain valuable insights into the intricate tapestry that shapes their insurance premiums. 

• Personal factors play a fundamental role in shaping insurance rates. Attributes like age, driving history, and credit score have a significant impact. For instance, younger drivers with less experience often face higher premiums due to the perceived higher risk they pose. Additionally, a driver’s past accidents, violations, and creditworthiness can also affect their insurance rates.
• Vehicle specifications hold substantial weight in determining insurance rates. Factors such as the make, model, year, and safety features of a vehicle can significantly impact premiums. Luxury or high-performance cars may incur higher costs due to their increased replacement and repair expenses, while vehicles equipped with advanced safety features may be eligible for discounts.
• Coverage and deductibles directly influence insurance rates. The extent of coverage chosen and the deductibles opted for play a vital role in premium calculations. Higher coverage limits and lower deductibles typically result in higher premiums, whereas lower coverage limits and higher deductibles may lead to more affordable rates.
• Crime rates within a state have a bearing on car insurance premiums. Rates are influenced by the prevalence of vehicle theft and vandalism. States with higher crime rates often have increased premiums to offset the elevated risk of vehicle-related incidents.
• State-specific regulations govern car insurance rates. Minimum coverage requirements, no-fault insurance laws, and other legal factors vary significantly from state to state, directly impacting insurance rates. Understanding the regulations specific to your state is crucial in determining the rates you may encounter.
• The regional climate and the occurrence of natural disasters impact car insurance rates. States prone to severe weather events such as hurricanes, tornadoes, or hailstorms may experience higher premiums. These rates reflect the increased risk of vehicle damage and loss associated with such events.
• Uninsured/underinsured motorist rates influence car insurance premiums. The prevalence of uninsured or underinsured motorists within a state can impact rates for insured drivers. Higher rates of uninsured drivers may lead to increased premiums for insured drivers to compensate for the potential costs involved in accidents with uninsured motorists.
• Location is a significant factor in determining car insurance rates. Geographical aspects such as population density, traffic congestion, and crime rates contribute to the assessment of risk, resulting in higher premiums in areas with heightened risks associated with these factors.

The best way to navigate the rising costs of car insurance, then, is to understand these disparate factors and undertake self-assessments while comparing quotes from multiple providers and exploring available discounts. It encourages drivers to inquire about safe driving programs, bundling options, and loyalty discounts that can help reduce premiums. Additionally, maintaining a good credit score and reviewing coverage periodically can contribute to managing insurance costs effectively.

How to get the best car insurance rate

To embark on your quest for the ideal rates, you have two options: scour the web for free quotes or seek assistance from an auto insurance agent. Here’s a breakdown of the steps involved in unearthing the most favorable car insurance rates:

• Assemble the necessary information: Before delving into the realm of car insurance quotes, it’s crucial to gather some essential details. These include:
  • Pertinent information about all drivers in your household, encompassing birthdates, occupations, and license numbers.
  • Comprehensive vehicle particulars, such as the make, model, VIN (Vehicle Identification Number), and mileage.
  • A comprehensive driving history.
  • The average number of miles driven per year. Information on your current coverage, if applicable.
• Determine the desired coverage level: Following the data collection phase, it’s time to determine the level of coverage that best suits your needs. While New Hampshire residents may not be legally mandated to have coverage,[5] most states require a minimum amount of bodily injury and property damage liability insurance. This coverage protects you against costs associated with damage caused to other drivers. Moreover, your state might require medical coverage or underinsured/uninsured motorist insurance.

While opting for your state’s minimum liability requirements may appear to be the most cost-effective route, it may not sufficiently cover major incidents. Additionally, it could fail to compensate you for accidents you may cause. To ensure optimal protection, it’s prudent to consider higher coverage limits, even if they come at a greater expense.

• Explore car insurance quotes: Now comes the exciting phase of exploring various car insurance quotes. Multiple avenues can be pursued to secure these rates. Utilize a quote comparison tool for a comprehensive analysis, navigate directly to insurance providers’ websites to retrieve quotes, or enlist the help of a car insurance broker who can furnish quotes from numerous companies. For a well-rounded perspective, you could compare quotes from multiple different companies.
• Seal the deal on your car insurance policy: Once armed with a collection of quotes and armed with knowledge about which car insurance policy aligns with your needs, it’s time to finalize your decision and proceed with purchasing the policy that best suits your requirements. With this step, you embark on a journey of comprehensive coverage and peace of mind.

Further reading

Want more articles about insurance? Here are four more articles to read about insurance and business driving:

1. Business vehicle insurance policies for reimbursement programs | Cardata 
2. Cardata | Insurance Compliance for Your Company and Drivers
3. What businesses need to know about US car insurance
4. Cardata | What insurance do I need to drive for work?   

Conclusion

Having at least a preliminary picture of vehicle insurance premiums and how they differ across various locations should serve as a valuable resource for individuals seeking a comprehensive understanding of insurance costs. By immersing ourselves in fluctuating data and unveiling the intricate details, drivers can empower themselves to navigate the complex insurance market confidently. Remember, choosing the right coverage is not merely about numbers—but about protecting your assets and securing your peace of mind on the open road.

Sources

[1] You finally can afford the car. Now, what about insurance? Why that could be a problem. 

[2] Average Cost of Car Insurance for June 2023 – NerdWallet 

[3] Ontario’s auto insurance premiums spike 12% 

[4] Most expensive provinces for auto insurance premiums revealed | Insurance Business Canada 

[5] Do You Need Car Insurance in New Hampshire? 

^{Disclaimer: Nothing in this blog post is legal, accounting, or insurance advice. Consult your lawyer, accountant, or insurance agent, and do not rely on the information contained herein for any business or personal financial or legal decision-making. While we strive to be as reliable as possible, we are neither lawyers nor accountants or agents. For several citations of IRS publications on which we base our blog content ideas, please always consult this article: https://www.cardata.co/blog/irs-rules-for-mileage-reimbursements. For Cardata’s terms of service, go here: https://www.cardata.co/terms.}