State of Auto Insurance in 2021
Auto insurance rates have fallen for the first time in over a decade — decreasing by 1.7% across the U.S. for 2021. However, premiums are still 106% more expensive when compared to 2011.
ValuePenguin used the Quadrant Information Services database to analyze 15 million quotes for drivers across the country. These, combined with RateWatch filings, were used to illustrate current and historical pictures of the auto insurance industry.
How much does auto insurance cost in my state?
The average cost of car insurance for 2021 is $1,636.
Auto insurance rates in Michigan average $7,406 a year, the highest in the U.S. and 353% higher than the national average — primarily due to the state having the highest minimum requirements for drivers.
Florida ($2,795 — 71% higher than the national average) and Rhode Island ($2,482 — 52% higher) both have some of the most expensive yearly rates compared to national averages.
For cheap car insurance, residents in Maine ($865), North Carolina ($976) and Indiana ($987) will find they have the lowest auto rates across the U.S. Auto insurance in these states is 40% cheaper, on average, than nationally.
Annual auto insurance rate changes by state
Five states will see marginal increases, including New York by 1.2% and Indiana by 1.1%, despite a decrease in the national average.
The biggest year-over-year rate decreases are in Arkansas (4.8%), Ohio (4.3%) and Michigan (4.3%).
In the 45 states where rates are decreasing, the average drop is 2.3%.
What is the cost of a traffic violation, ticket or accident?
For 2021, we found that an individual with a traffic violation could see an average premium increase of 117% on average across these variables.
North Carolina has the largest percentage increase (255%) in auto insurance premiums on average for the violations we analyzed.
Florida auto insurance companies are the most forgiving under these circumstances. Insurers only increase premiums by 55% on average across these variables.
Individuals with DUI violations could see their premiums increase by 157% on average.
Minor violations, such as a failure to obey traffic signs, had the smallest increase to insurance premiums, rising 28%.
State | Average percent increase due to violation | DUI | Accident | Speeding |
|---|---|---|---|---|
| North Carolina | 255% | $5,044 | $1,334 | $1,100 |
| California | 213% | $3,937 | $2,334 | $1,484 |
| Alaska | 204% | $1,299 | $1,098 | $3,942 |
| Hawaii | 179% | $4,449 | $1,155 | $844 |
| Michigan | 142% | $19,715 | $6,725 | $5,160 |
| Wyoming | 133% | $2,206 | $1,487 | $1,381 |
| Montana | 131% | $2,169 | $1,812 | $1,428 |
| Massachusetts | 129% | $2,222 | $1,865 | $1,467 |
Percent increases due to violations are an average across all three violations analyzed in this study.
Future of Auto Insurance
Auto insurance companies are offering lower rates for customers in 2021 after last year saw an unprecedented low level of claims.
Auto insurance rates are likely to rebound
This is primarily due to the possibility of the economy opening up more across the U.S., which will increase travel needs and the number of accident claims.
Increase in distracted driving
Technology heavily impacts our day-to-day lives, and some people can’t put down their devices while operating a vehicle. This has drastically increased distracted driving injuries and fatalities, with nearly 3,000 yearly deaths on average.
Company-specific auto insurance plans
Car manufacturers are rolling out new company-specific insurance policies. Tesla has begun to roll out its plan in California, while General Motors has future plans, too.
Smart Technology
Vehicles are now more equipped with on-board gadgets. When getting into a crash, this can make car insurance claims amounts spike, leading to insurers increasing rates across the board for these vehicles.
How can I save money on auto insurance in 2021?
Compare car insurance quotes
The most important aspect of searching for car insurance will be comparing quotes from several insurers. Our analysis shows that quotes can vary by 242% between the largest insurance companies (USAA and Farmers) for minimum coverage.
Utilize car insurance discounts
Insurance companies have been offering several forms of assistance to their policyholders due to COVID-19. According to a ValuePenguin survey, many drivers are not aware, as only 31% have asked for a form of financial help.
Adjust your collision and comprehensive deductible
Switching from full to minimum coverage is a great way to save a significant amount on your car insurance premiums. The two coverages can differ by close to 155% ($2,390 a year for full, versus $937 a year for minimum).
Credit score improvement
Credit scores can be a key factor for auto insurance companies when determining premiums. Our analysis found the difference between a good and poor credit score can change premiums by 70%.
About this report
ValuePenguin has a mission to empower consumers with information and resources to help make smarter and more financially sound decisions. In this case, car insurance can be a difficult and time-consuming topic to understand. This report attempts to unmask some of these key issues.
In crafting the analysis, more than 15 million quotes were run on our sample driver profile across a variety of different factors and variables that affect auto insurance premiums. Additionally, it’s equally important to evaluate our sample driver against different companies, as providers tend to change their rates drastically.
Media Contact
15 million
Quotes
35,000
Zip Codes
72
U.S. Insurance Companies
Methodology of this report
Auto insurance rate change data was compiled using RateWatch from S&P Global. The tool is updated yearly using information posted by the National Association of Insurance Commissioners (NAIC).
Our base driver was a 30-year-old male who drove a 2015 Honda Civic EX, and quotes were drawn from all available ZIP codes in each state. Standard rates and rate changes were for a driver profiled as having average credit history and no prior traffic violations or history. For all other quotes such as a DUI or speeding ticket, variables were changed within the quote system to get the desired outcome.
ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only, as your quotes may be different.
Full Coverage Policy
| Coverage Type | Study limits |
|---|---|
| Bodily liability | $50,000 per person/$100,000 per accident |
| Property damage | $25,000 per accident |
| Uninsured/underinsured motorist BI | $50,000 per person/$100,000 per accident |
| Comprehensive and collision | $500 deductible |
| Personal injury protection | Minimum when required by state |