Auto Insurance
States That Pay the Most — and Least — on Insurance
Insurance costs are on the rise, and consumers are certainly feeling it in their pockets. Overall, American households spend an average of 5.3% of their income on health, auto and home insurance — but that spending varies by state.
ValuePenguin researchers looked at where households pay the largest (and smallest) percentage of their income for these insurance types. Here's what we found.
On this page
- Key findings
- U.S. households spend an average of $5,423 annually on insurance
- Michigan households spend the highest percentage of their income on insurance
- Hawaii households spend just 3.8% of their income on insurance
- Households are spending 7.0% less on insurance (based on income) year over year
- Saving on insurance: Expert tips
- Methodology
Key findings
- American households spend an average of 5.3% of their income — or $5,423 — on health, auto and home insurance. Health insurance accounts for the biggest chunk of insurance costs at an average of 39.2%, while auto and home insurance account for an average of 32.8% and 28.0%, respectively.
- Michigan households spend the highest percentage of their income on health, auto and home insurance. Households in the state spend an average of 9.0% — or $7,940 — on these insurances, ahead of Louisiana (8.0%, or $6,306) and Oklahoma (7.4%, or $6,152).
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Hawaii households spend the smallest percentage of their income on health, auto and home insurance. Households in the state spend an average of 3.8% — or $4,596 — on these insurances, with Alaska (4.1%, or $4,446) and Washington (4.1%, or $4,726) next.
- U.S. households are spending 7.0% less of their income year over year on these insurances. Households spent an average of 5.7% of their income — or $5,507 — the prior year on health, auto and home insurance. Michigan (12.3%, or $10,567) and Louisiana (9.4%, or $7,202) were at the top the year before, too. Hawaii (3.9%, or $4,427) remained at the bottom.
U.S. households spend an average of $5,423 annually on insurance
On average, American households spend 5.3% of their income on health, auto and home insurance — amounting to $5,423.
Broken down by type, health insurance accounts for the biggest chunk of the costs — $2,127 annually, or 39.2% of insurance costs.
Meanwhile, auto insurance accounts for 32.8% of total insurance costs, at an average of $1,780 annually. That's followed by home insurance at an average of $1,516 annually, or 28.0% of insurance costs.
Average cost of insurance by type
Insurance type | Average annual cost | % of total insurance cost |
|---|---|---|
| Health | $2,127 | 39.2% |
| Auto | $1,780 | 32.8% |
| Home | $1,516 | 28.0% |
| Overall cost | $5,423 | N/A |
Sources: ValuePenguin analysis of U.S. Census Bureau Current Population Survey Annual Social and Economic Supplement and Quadrant Information Services data.
According to ValuePenguin home insurance expert Nick VinZant, rising costs are likely to blame for insurance taking up a significant chunk of people's income.
"That's why it's so important to shop around," he says. "People can really save by shopping around for all their insurance policies."
Health insurance premiums, in particular, have risen dramatically over the past decade. Between 2010 and 2022, individual coverage premiums rose nearly 57% and family coverage premiums more than 63%, according to the 2022 and 2010 Kaiser Family Foundation Employer Health Benefits surveys.
That's largely because medical spending as a whole has risen. According to another ValuePenguin study on health care expenditures, medical spending increased 14% between 2016 and 2019 alone. Not only has the cost to treat most medical conditions risen (with some conditions costing 120.4% more to diagnose and treat), but administrative and pharmaceutical costs have also risen by as much as 24.2% in the same period.
Auto and homeowner insurance have also seen substantial increases over various periods. While average homeowners insurance premiums increased 15% between 2013 and 2018, average car insurance rose 8.4% between 2022 and 2023.
Michigan households spend the highest percentage of their income on insurance
By state, Michigan households spend the highest percentage of their income on health, auto and home insurance. Households in the state spend an average of 9.0% on these insurances — or an average of $7,940.
Notably, the largest chunk of this is auto insurance — in Michigan, auto insurance accounts for 60.3% of total insurance costs. Michigan residents pay $4,788 a year for their auto insurance, the highest in the U.S. and 168% higher than the national average. This is largely due to the state's no-fault law: Insurers are required to cover the reasonable and necessary medical expenses for drivers and their passengers injured in an accident, regardless of fault.
Michigan spends the most on auto insurance, but which states claim the other two categories? For health insurance, New Jersey tops the list. In this state, health insurance accounts for $2,762 (or 45.8%) of insurance costs. Meanwhile, Colorado tops the list for home insurance costs. Home insurance accounts for $2,900 (or 40.4%) of insurance costs in this state.
States where households spend the highest percentage of income on health, auto and home insurance
Rank | State | Average household income | Health insurance annual cost | Home insurance annual cost | Auto insurance annual cost | Total insurance annual cost | Percentage of income to insurance |
|---|---|---|---|---|---|---|---|
| 1 | Michigan | $87,784 | $1,929 | $1,223 | $4,788 | $7,940 | 9.0% |
| 2 | Louisiana | $78,951 | $1,872 | $2,058 | $2,376 | $6,306 | 8.0% |
| 3 | Oklahoma | $82,644 | $1,918 | $2,278 | $1,956 | $6,152 | 7.4% |
| 4 | Florida | $94,357 | $1,836 | $2,207 | $2,856 | $6,899 | 7.3% |
| 5 | Kansas | $90,601 | $2,585 | $2,265 | $1,656 | $6,506 | 7.2% |
| 5 | Nebraska | $92,030 | $2,323 | $2,554 | $1,704 | $6,581 | 7.2% |
Sources: ValuePenguin analysis of U.S. Census Bureau American Community Survey, U.S. Bureau of Economic Analysis (BEA), U.S. Census Bureau Current Population Survey Annual Social and Economic Supplement and Quadrant Information Services data.
Next is Louisiana, where residents spend 8.0% of their income — or $6,306 — on the three insurance types combined. Auto insurance again makes up the chunk of the costs, though it's significantly lower than costs in Michigan. Louisiana residents pay an average of $2,376 on auto insurance annually, accounting for 37.7% of total insurance costs in the state.
Oklahoma follows. Residents here spend 7.4% of their income on health, auto and home insurance — or $6,152. Home insurance accounts for the largest portion of the costs here, with residents spending $2,278 annually, or 37.0% of total insurance costs. This could be due to the risk of severe storms in the state: Between 2017 and 2021, tornadoes were the leading cause of severe weather damages in Oklahoma, causing $95.6 million in property damages. In 2022, Oklahoma experienced 58 tornadoes.
Hawaii households spend just 3.8% of their income on insurance
When it comes to the states that spend the lowest percentage of their income on insurance, Hawaii leads. On average, households in the Aloha State spend 3.8% of their income on health, auto and home insurance, or $4,596 annually.
Following that, households in Alaska spend an average of 4.1% of their income on these insurance types — or $4,446 annually. Washington state ties here at 4.1%, or $4,726.
While these states spend the smallest percentage of income on insurance costs, it's worth noting that West Virginia ranks lowest for average insurance costs. Households in this state spend an average of just $4,162 annually on health, auto and home insurance.
States where households spend the smallest percentage of income on health, auto and home insurance
Rank | State | Average household income | Health insurance annual cost | Home insurance annual cost | Auto insurance annual cost | Total insurance annual cost | Percentage of income to insurance |
|---|---|---|---|---|---|---|---|
| 1 | Hawaii | $119,542 | $1,737 | $987 | $1,872 | $4,596 | 3.8% |
| 2 | Alaska | $109,247 | $1,735 | $1,307 | $1,404 | $4,446 | 4.1% |
| 2 | Washington | $114,328 | $1,898 | $1,292 | $1,536 | $4,726 | 4.1% |
| 4 | California | $125,345 | $1,831 | $1,839 | $1,752 | $5,422 | 4.3% |
| 5 | New York | $116,493 | $1,921 | $1,418 | $1,788 | $5,127 | 4.4% |
| 5 | Utah | $108,308 | $2,265 | $897 | $1,656 | $4,818 | 4.4% |
| 5 | Pennsylvania | $96,749 | $2,081 | $736 | $1,488 | $4,305 | 4.4% |
Sources: ValuePenguin analysis of U.S. Census Bureau American Community Survey, U.S. Bureau of Economic Analysis (BEA), U.S. Census Bureau Current Population Survey Annual Social and Economic Supplement and Quadrant Information Services data.
According to VinZant, risk likely plays the largest role in these states' rankings.
"It boils down to risk factors," he says. "The less risk insurance companies think your state has, the less you're going to pay. States in the Midwest deal with severe storms, wildfires, tornadoes, flooding and drought, so they have some of the most expensive insurance policies in the nation."
Although overall costs are comparatively low, households in these states may shell out significantly more for one type of insurance. Here's what takes up the largest chunk of insurance costs among the three states that rank lowest:
- Auto insurance accounts for 40.7% of insurance costs in Hawaii.
- Health insurance accounts for 39.0% of insurance costs in Alaska.
- Health insurance accounts for 40.2% of costs in Washington.
In Alaska, competition between specialty care providers may play a role in high health insurance costs. Labor costs in the state are high — in fact, a 2020 report by Alaska Policy Forum found that spending on physician and clinical services in Alaska are 50% to 80% higher than the national average. Due to high labor costs, it's also worth noting that Medicaid expenditures are up to 56% higher in Alaska than the national average.
Like Alaska, limited competition among health care providers may play a role in high health insurance costs in Washington. That's particularly true for primary care physicians (PCPs): An earlier ValuePenguin study found there are 168.7 PCPs for every 100,000 Americans — by state, however, Washington had the fewest PCPs, with just 107.9 per 100,000 residents.
Full rankings
Cost of health, auto and home insurance as a percentage of household income by state
Rank | State | Average household income | Health insurance annual cost | Home insurance annual cost | Auto insurance annual cost | Total insurance annual cost | Percentage of income to insurance |
|---|---|---|---|---|---|---|---|
| 1 | Michigan | $87,784 | $1,929 | $1,223 | $4,788 | $7,940 | 9.0% |
| 2 | Louisiana | $78,951 | $1,872 | $2,058 | $2,376 | $6,306 | 8.0% |
| 3 | Oklahoma | $82,644 | $1,918 | $2,278 | $1,956 | $6,152 | 7.4% |
| 4 | Florida | $94,357 | $1,836 | $2,207 | $2,856 | $6,899 | 7.3% |
| 5 | Kansas | $90,601 | $2,585 | $2,265 | $1,656 | $6,506 | 7.2% |
| 5 | Nebraska | $92,030 | $2,323 | $2,554 | $1,704 | $6,581 | 7.2% |
| 7 | Kentucky | $77,582 | $1,806 | $1,571 | $2,040 | $5,417 | 7.0% |
| 7 | Alabama | $79,729 | $1,856 | $2,021 | $1,668 | $5,545 | 7.0% |
| 9 | Montana | $85,444 | $2,204 | $1,821 | $1,752 | $5,777 | 6.8% |
| 10 | Arkansas | $76,867 | $1,983 | $1,531 | $1,656 | $5,170 | 6.7% |
| 11 | South Dakota | $86,668 | $2,229 | $1,741 | $1,776 | $5,746 | 6.6% |
| 12 | Mississippi | $71,244 | $1,705 | $1,257 | $1,560 | $4,522 | 6.3% |
Sources: ValuePenguin analysis of U.S. Census Bureau American Community Survey, U.S. Bureau of Economic Analysis (BEA), U.S. Census Bureau Current Population Survey Annual Social and Economic Supplement and Quadrant Information Services data.
Households are spending 7.0% less (based on income) on insurance year over year
While insurance costs are high, there's one silver lining: U.S. households are spending less of their income on health, auto and insurance than the year before.
The year before our current analysis, households spent an average of 5.7% of their income — or $5,507 — on health, auto and home insurance. That's 7.0% more than they're paying now.
By state, Michigan and Louisiana were at the top the prior year, though residents in these states paid more that year (more on that below). In Michigan, residents spent an average of 12.3% — or $10,567 — of their income on health, auto and home insurance. In Louisiana, meanwhile, they spent an average of 9.4% — or $7,202 — of their income. That's followed by South Dakota, where residents spent 8.5% — or $7,066 — of their income on insurance costs.
On the other hand, Hawaii remained at the bottom of the list, while Washington and Alaska again ranked in the top three. To break that down:
- In Hawaii, residents spent 3.9% — or $4,427 — on insurance costs.
- In Washington, residents spent 4.2% — $4,696 — on insurance costs.
- In Alaska, residents spent 4.4% — or $4,559 — on insurance costs.
But what about the states that saw the biggest year-over-year increases in insurance costs? Here, North Carolina ranks first. While households in North Carolina spend an average of 5.0% of their income on health, auto and home insurance the year prior, they now spend an average of 6.0% of their income on these insurances. That's an increase of 20.0%.
Following that, Indiana was the only other state that saw a double-digit hike — from 5.5% to 6.1%, or an increase of 10.9%.
States with the biggest year-over-year increases in health, auto and home insurance costs as a percentage of income
Rank | State | Percentage of income to insurance, year prior | Percentage of income to insurance, now | Year-over-year difference |
|---|---|---|---|---|
| 1 | North Carolina | 5.0% | 6.0% | 20.0% |
| 2 | Indiana | 5.5% | 6.1% | 10.9% |
| 3 | Nebraska | 6.6% | 7.2% | 9.1% |
| 4 | Idaho | 5.1% | 5.5% | 7.8% |
| 5 | Tennessee | 5.7% | 6.0% | 5.3% |
Sources: ValuePenguin analysis of U.S. Census Bureau American Community Survey, U.S. Bureau of Economic Analysis (BEA), U.S. Census Bureau Current Population Survey Annual Social and Economic Supplement and Quadrant Information Services data.
Good news for Michiganders, though: While insurance costs were highest here, households in Michigan saw the largest year-over-year decrease among the states. While households in Michigan spent an average 12.3% of their income on health, auto and home insurance the year prior, that figure fell to 9.0% now. That's a decrease of 26.8%.
Following that, South Dakota saw the second largest year-over-year decrease — falling 22.4% from 8.5% to 6.6%.
States with the biggest year-over-year decreases in health, auto and home insurance costs as a percentage of income
Rank | State | Percentage of income to insurance, year prior | Percentage of income to insurance, now | Year-over-year difference |
|---|---|---|---|---|
| 1 | Michigan | 12.3% | 9.0% | -26.8% |
| 2 | South Dakota | 8.5% | 6.6% | -22.4% |
| 3 | West Virginia | 7.3% | 5.8% | -20.5% |
| 4 | South Carolina | 7.2% | 5.9% | -18.1% |
| 5 | Missouri | 7.3% | 6.2% | -15.1% |
Sources: ValuePenguin analysis of U.S. Census Bureau American Community Survey, U.S. Bureau of Economic Analysis (BEA), U.S. Census Bureau Current Population Survey Annual Social and Economic Supplement and Quadrant Information Services data.
Full rankings
Cost of health, auto and home insurance as a percentage of household income by state (the year prior)
Rank | State | Average household income | Health insurance annual cost | Home insurance annual cost | Auto insurance annual cost | Total insurance annual cost | Percentage of income to insurance |
|---|---|---|---|---|---|---|---|
| 1 | Michigan | $85,727 | $1,913 | $1,493 | $7,161 | $10,567 | 12.3% |
| 2 | Louisiana | $77,025 | $1,914 | $1,568 | $3,720 | $7,202 | 9.4% |
| 3 | South Dakota | $83,175 | $2,703 | $2,364 | $1,999 | $7,066 | 8.5% |
| 4 | Oklahoma | $78,040 | $1,727 | $2,559 | $1,885 | $6,171 | 7.9% |
| 5 | Florida | $88,267 | $1,772 | $1,727 | $2,962 | $6,461 | 7.3% |
| 5 | West Virginia | $69,436 | $1,878 | $1,416 | $1,757 | $5,051 | 7.3% |
| 5 | Kansas | $87,033 | $2,111 | $2,461 | $1,759 | $6,331 | 7.3% |
| 5 | Missouri | $83,152 | $2,274 | $1,914 | $1,859 | $6,047 | 7.3% |
| 9 | Kentucky | $76,511 | $1,782 | $1,407 | $2,346 | $5,535 | 7.2% |
| 9 | South Carolina | $81,142 | $1,824 | $2,321 | $1,686 | $5,831 | 7.2% |
| 11 | Mississippi | $68,636 | $1,609 | $1,442 | $1,795 | $4,846 | 7.1% |
| 12 | Alabama | $76,150 | $1,624 | $1,850 | $1,724 | $5,198 | 6.8% |
Sources: ValuePenguin analysis of U.S. Census Bureau American Community Survey, U.S. Bureau of Economic Analysis (BEA), U.S. Census Bureau Current Population Survey Annual Social and Economic Supplement and Quadrant Information Services data.
Year-over-year difference in health, auto and home insurance costs as percentage of income by state
Rank | State | Percentage of income to insurance, year prior | Percentage of income to insurance, now | Year-over-year difference |
|---|---|---|---|---|
| 1 | Michigan | 12.3% | 9.0% | -26.8% |
| 2 | South Dakota | 8.5% | 6.6% | -22.4% |
| 3 | West Virginia | 7.3% | 5.8% | -20.5% |
| 4 | South Carolina | 7.2% | 5.9% | -18.1% |
| 5 | Missouri | 7.3% | 6.2% | -15.1% |
| 6 | Louisiana | 9.4% | 8.0% | -14.9% |
| 7 | California | 5.0% | 4.3% | -14.0% |
| 8 | New Mexico | 6.1% | 5.3% | -13.1% |
| 9 | Iowa | 6.3% | 5.5% | -12.7% |
| 10 | Oregon | 5.6% | 4.9% | -12.5% |
| 11 | Pennsylvania | 5.0% | 4.4% | -12.0% |
| 12 | Delaware | 5.3% | 4.7% | -11.3% |
Sources: ValuePenguin analysis of U.S. Census Bureau American Community Survey, U.S. Bureau of Economic Analysis (BEA), U.S. Census Bureau Current Population Survey Annual Social and Economic Supplement and Quadrant Information Services data.
Saving on insurance: Expert tips
Given how much insurance consumes household salaries, finding ways to cut costs could be particularly important. Regardless of which insurance type you're looking to save money on, VinZant offers the following tips:
- Shop around. Comparing rates across a wide range of companies can save a significant amount of cash. In fact, an earlier ValuePenguin survey on shopping around found that 30% of Americans who compared insurance quotes saved $500 or more.
- Keep a clean driving record. While accidents happen, keeping a clean driving record could qualify you for a good driver discount. These discounts could help you save anywhere between 10% to 30% on your car insurance premiums.
- See if you qualify for discounted health insurance rates. If you're a low-income consumer, you may qualify for free or low-cost insurance through Medicaid. In addition, if you're a low-income consumer on a marketplace plan, you may be able to offset the costs through tax credits.
Methodology
ValuePenguin analysts first pulled average household incomes from the U.S. Census Bureau 2021 American Community Survey with five-year estimates. To estimate average household incomes in 2022, we used U.S. Bureau of Economic Analysis (BEA) personal income data to update the 2021 U.S. Census Bureau data.
Separately, we found the combined cost of insurance for the following forms of coverage:
- Full coverage auto insurance
- Home Insurance
- Health insurance
We used U.S. Census Bureau Current Population Survey Annual Social and Economic Supplements from 2022 and 2021 for health insurance costs.
Both home and auto insurance rates are from 2023 (and 2022 for year-over-year comparisons). For auto insurance premiums, we collected quotes across all 50 states across every ZIP code. Quotes are for a 30-year-old man who drives a 2015 Honda Civic EX with good credit. Our home insurance rates reflect the cost to insure a median-value home in each state.
ValuePenguin’s analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used only for comparative purposes, as your quotes may differ.