In this article, we will look at 20 states where car insurance costs the least. If you want to skip our detailed analysis of the motor insurance market in the US, you can go directly to 5 States Where Car Insurance Costs The Least.
The US Motor Insurance Market at a Glance
The US motor insurance market is a large sector, with a diverse range of providers and products catering to the needs of millions of motor vehicle owners and drivers. According to a report by Mordor Intelligence, the United States motor insurance market’s value is estimated to have reached $344.53 billion in 2023. Looking forward, the motor insurance market in the US is expected to grow at a compound annual growth rate of 4.7% during 2023-2028, pushing the market to reach $433.46 billion by the end of the forecast period.
Almost all of the states in the US require car drivers to carry some form of auto insurance. This ensures a baseline demand for insurance coverage in the country. Additionally, population growth, rapid urbanization, and rising disposable incomes are all contributing to a steady increase in vehicle ownership across America. This directly translates to a larger customer base for insurance providers and fuels market growth.
In one of our previous articles about the best car insurance companies of 2023, we briefly discussed how autonomous driving, connectivity, and embedded telematics are shaping the future of mobility and auto insurance. Connectivity and telematics technology such as cameras and sensors can provide real-time, accurate data that allows insurers to offer personalized premiums based on individual driving behavior, promoting fairness while also rewarding safe driving. Real-time data from connected motor vehicles will also allow insurance providers to assess risks more accurately, which can lead to improved risk management strategies.
However, autonomous vehicles are expected to drastically reduce accidents, leading to lower insurance premiums and potentially impacting the insurance market's business model. As the motor insurance market transforms, insurance providers need to adapt their strategies, embrace technology, and develop innovative solutions to thrive in this rapidly changing landscape.
Leading Companies in the US Motor Insurance Market
Some of the most prominent names in the US motor insurance market are Travelers Companies, Inc. (NYSE:TRV), The Progressive Corporation (NYSE:PGR), and The Allstate Corporation (NYSE:ALL).
The Allstate Corporation (NYSE:ALL) is an American insurance company that offers insurance services for autos, electronics, homes, devices, and identity theft. Its products are available through a broad distribution network which includes Allstate agents, independent agents, online, and major retailers, among others. On November 1, CNBC reported that The Allstate Corporation (NYSE:ALL) and the German Insurance company Allianz SE (ETR:ALV) are making a major strategic move to capitalize on the digital transformation of the commercial insurance market. The two big insurance companies are making a $265 million investment in Next Insurance, an insurance technology company dedicated to serving small businesses. The report also mentions that The Allstate Corporation (NYSE:ALL) and Next Insurance will be developing commercial auto insurance products, a market that is still highly manual in the US.
The Progressive Corporation (NYSE:PGR) is an American insurance company and one of the largest auto insurance companies in the US. As a major insurer of cars, motorcycles, boats, and commercial vehicles, The Progressive Corporation (NYSE:PGR) has millions of customers and policies in force today. On October 13, The Progressive Corporation (NYSE:PGR) reported strong earnings for the fiscal third quarter of 2023. The company reported an EPS of $2.11 and beat estimates by $0.4. The company’s revenue for the quarter grew by 19.79% year-over-year and amounted to $15.59 billion, ahead of market consensus by $231.2 million.
Car insurance companies are expanding their product offerings and gaining market share through mergers and acquisitions. Travelers Companies, Inc. (NYSE:TRV) is an American insurance company and a leading provider of property casualty insurance for autos, homes and businesses. On November 3, Travelers Companies, Inc. (NYSE:TRV) announced that it has agreed to acquire Corvus Insurance Holdings, Inc. for about $435 million. Powered by proprietary technology, Corvus is a leading cyber insurance managing general underwriter that has developed a suite of integrated cyber sales, service, and support capabilities. Through its platform, Corvus effectively identifies vulnerabilities throughout the policy period, mitigating client exposure to cyber events. The report by Travelers Companies, Inc. (NYSE:TRV) mentions that this transaction is expected to close in the first quarter of 2024.
Now that we have discussed some recent market trends and what major motor insurance companies are up to, let’s take a look at 20 states where car insurance costs the least. You can also take a look at states with the most expensive car insurance in the US.
20 States Where Car Insurance Costs The Least
A woman in her car checking her insurance documents with a satisfied smile.
Methodology
In this article, we have listed 20 states where car insurance costs the least. To collect data for our list of lowest car insurance rates by state, we consulted Compare.com. This database provided us with average monthly rates for full coverage as well as average monthly rates for liability coverage in all US states. We used data available for the latest year in their dataset, which is 2023. We used the average monthly rates for full coverage insurance as the primary metric to rank the 20 states where car insurance costs the least. We used the average monthly rates for liability coverage as our secondary metric. In the case where multiple states had the same average monthly rates for full coverage insurance, tie breaking was done on the basis of average liability insurance cost. The states with lower average insurance costs are ranked higher on the list.
20 States Where Car Insurance Costs The Least
20. Virginia
Average Full Coverage Insurance Cost: $154
Average Liability Insurance Cost: $73
First up on our list of 20 states where car insurance costs the least is Virginia. In the southeastern US state of Virginia, the monthly average full coverage insurance cost is $154, while the average liability insurance cost is $73 per month.
19. North Dakota
Average Full Coverage Insurance Cost: $154
Average Liability Insurance Cost: $55
North Dakota in the Upper Midwest is one of the least populated states in the US. As of 2023, the average monthly rate for full coverage insurance is $154 in North Dakota. The average monthly rate for liability insurance in the state is $55.
18. South Carolina
Average Full Coverage Insurance Cost: $152
Average Liability Insurance Cost: $81
South Carolina is a southeastern US state that is known for its subtropical beaches and sea islands. With an average monthly rate of $152 for full coverage insurance, South Carolina ranks 18th on our list of states where car insurance costs the least. The state’s average monthly liability insurance cost is $81.
17. California
Average Full Coverage Insurance Cost: $148
Average Liability Insurance Cost: $70
California is the third largest and most populated state in the US. In the western US state of California, the monthly average full coverage insurance cost is $148, while the average liability insurance cost is $70 per month.
16. Wyoming
Average Full Coverage Insurance Cost: $148
Average Liability Insurance Cost: $40
Wyoming in the Mountain West sub-region is the least populated state in the US. As of 2023, the average monthly rate for full coverage insurance is $148 in Wyoming. The average monthly rate for liability insurance in Wyoming is $40, which makes it one of the cheapest states for liability insurance coverage.
15. Washington
Average Full Coverage Insurance Cost: $147
Average Liability Insurance Cost: $72
The state of Washington in the Pacific Northwest region of the US ranks among the top 15 on our list of states where car insurance costs the least. In Washington state, the monthly average full coverage insurance cost is $147, while the average liability insurance cost is $72 per month.
14. Tennessee
Average Full Coverage Insurance Cost: $143
Average Liability Insurance Cost: $60
Tennessee is a landlocked state in the Southeastern region of the US. As of 2023, the average monthly rate for full coverage insurance is $143 in Tennessee. The average monthly rate for liability insurance in the state is $60.
13. Nebraska
Average Full Coverage Insurance Cost: $139
Average Liability Insurance Cost: $50
Nebraska is a midwestern US state that ranks on the number 13 spot on our list of states where car insurance costs the least. The state’s average monthly rate for full coverage insurance is $139. The average monthly liability insurance cost in Nebraska is $50.
12. Mississippi
Average Full Coverage Insurance Cost: $130
Average Liability Insurance Cost: $56
Mississippi is a southern US state with the Mississippi River to its west. As of 2023, the average monthly rate for full coverage insurance is $130 in Mississippi. The average monthly rate for liability insurance in the state of Mississippi is $56.
11. Indiana
Average Full Coverage Insurance Cost: $122
Average Liability Insurance Cost: $51
Indiana is a state in the Midwestern region of America, and it is known for its vast farmlands. In the US state of Indiana, the monthly average full coverage insurance cost is $122, while the average liability insurance cost is $51 per month.
10. South Dakota
Average Full Coverage Insurance Cost: $118
Average Liability Insurance Cost: $36
South Dakota ranks among some of the least populated states in the US. With an average monthly rate of $118 for full coverage insurance, it ranks among the top 10 on our list of states where car insurance costs the least. The average monthly rate for liability insurance in South Dakota is $36, which makes it one of the cheapest states for liability insurance coverage.
9. Alaska
Average Full Coverage Insurance Cost: $117
Average Liability Insurance Cost: $49
Alaska is the largest state in the US in terms of area, and at the same time it is also the third-least populated state. In the non-contiguous US state of Alaska, the monthly average full coverage insurance cost is $117, while the average liability insurance cost is $49 per month.
8. Ohio
Average Full Coverage Insurance Cost: $116
Average Liability Insurance Cost: $53
Ohio is a Midwestern US state that ranks among the most populated states in the country. As of 2023, the average monthly rate for full coverage insurance is $116 in Ohio. The average monthly rate for liability insurance in the state of Ohio is $53.
7. Iowa
Average Full Coverage Insurance Cost: $116
Average Liability Insurance Cost: $36
Iowa is a Midwestern US state that sits between the Missouri and Mississippi rivers. In the state of Iowa, the monthly average full coverage insurance cost is $116, while the average liability insurance cost is $36 per month. It ranks among the cheapest states for liability insurance coverage.
6. Hawaii
Average Full Coverage Insurance Cost: $114
Average Liability Insurance Cost: $53
Hawaii is the only US state which is an archipelago, and it ranks high among the states where car insurance costs the least. As of 2023, the average monthly rate for full coverage insurance is $114 in Hawaii. The average monthly rate for liability insurance in the state of Hawaii is $53.
