Direct answer: The cheapest states for car insurance tend to be places with fewer costly claims and fewer uninsured drivers. In 2023, Florida, Louisiana and New York had the highest average spending. A state average is only a starting point, though. Your real price comes from your ZIP code, your driving record and the coverage you choose.
Average car insurance spending in the U.S. rose 14.0% to $1,282 in 2023, up from $1,127 in 2022. That figure comes from NAIC data reported by the Insurance Information Institute. Florida drivers spent an average of $1,865 that year. That gap between states is why lists of the cheapest states for car insurance get so much attention.
If your renewal notice just made your stomach drop, you are not alone.
The catch is that nobody can buy a state average. You can only buy a quote for your car, at your address, with your record. In my 18 years in auto insurance marketing, I have watched state ranking headlines pull in drivers who were never going to move. What helped them was learning why prices differ, then using that to shop smarter where they already live.
What does “cheapest state” actually measure?
Most state rankings use average expenditure. That is what insured drivers in a state spent, on average, across all the policies sold there. It blends bare-bones policies with full coverage, so a state where more drivers buy only the minimum can look cheaper than it really is.
Most drivers buy more than the minimum. In 2023, 80% of insured drivers bought comprehensive and 77% bought collision on top of liability. So your bill may look nothing like a state average built on a different mix.
| Term | What it means | Why it matters to you |
|---|---|---|
| Average expenditure | What drivers in a state spent on average | Mixes cheap and full policies together |
| Minimum liability | The least coverage your state allows | Lowest premium, but you pay what goes past the limits |
| Full coverage (informal name) | Liability plus collision and comprehensive coverage | Costs more, and it also covers your own car |
| Your quote | The price for your car, ZIP and record | The only number you will actually pay |
Why do some states cost more than others?
Insurance prices follow claim costs. When crashes in a state lead to big medical bills and pricey repairs, everyone’s premium carries that weight.
The claim numbers are large. In 2024, the average bodily injury liability claim was $28,278. A property damage liability claim averaged $6,770, and a collision claim averaged $5,489. Repairs keep getting pricier, too. The BLS reports that vehicle maintenance and repair prices rose 5.8% in the 12 months ended September 2026.
Uninsured drivers push costs onto you
When a driver with no insurance hits you, your own policy often ends up paying. In 2023, 15.4% of motorists were uninsured, which is more than 1 in 7. The share swings widely by state.
| Most uninsured drivers (2023) | Share | Fewest uninsured drivers (2023) | Share |
|---|---|---|---|
| Mississippi | 28.2% | Maine | 5.7% |
| New Mexico | 24.1% | Utah | 6.2% |
| D.C. | 23.1% | Idaho | 6.4% |
| Michigan | 22.3% | Wyoming | 6.7% |
| Tennessee | 21.3% | Montana | 7.2% |
State minimums set the floor
Each state decides how much liability coverage you must carry. California raised its minimum to 30/60/15 at renewal starting January 1, 2025. That means $30,000 for one injured person, $60,000 per accident and $15,000 for property damage. Texas requires 30/60/25. When the floor goes up, the cheapest policy you can buy costs more.
What do the latest price numbers say?
The newest federal data shows some relief. The BLS consumer price index shows motor vehicle insurance prices fell 5.0% over the 12 months ended September 2026. That came after a 6.0% rise in 2025, as BLS data cited by III shows.
A national index dropping does not mean your bill dropped. It tracks prices across the country. Your insurer may still raise your rate because of claims in your ZIP code or a change in your record.
The most recent state spending data is from 2023. Florida led at $1,865, then Louisiana at $1,754 and New York at $1,753. The full state table is on the III page linked above. When you read a cheap state ranking, check the year and the source behind it.
The fine print: your ZIP and credit can matter more than your state
Two drivers in the same state can pay very different prices. Insurers rate the place where the car is kept. Local crash rates, theft and repair costs all feed into that.
Credit also plays a role in most states. The NAIC explains that insurers use credit-based insurance scores to set rates. In most states, an insurer can’t use the score as the only reason to raise your rate or drop you. Errors on your credit report can still hurt you.
Texas spells this out. The Texas Department of Insurance says credit can’t be the only factor, and insurers must give you a notice of your rights. Texas also allows exceptions for hard events like divorce, job loss or identity theft. You can check your reports for free at AnnualCreditReport.com, as the FTC notes.
Should you chase a cheaper state? Usually not
The usual advice says location drives price, so a move could save you money. That is true on paper. In real life, it rarely helps the driver reading the list.
If you really moved
Update your address with your insurer right away. Your new state may have different minimums and a different price. Some drivers pay less after a move, and some pay more. Get fresh quotes in the new state before your old policy ends.
If you’re tempted to use someone else’s address
Don’t. Your price is based on where the car is kept. Giving a false address is a misrepresentation, and it can put your coverage at risk when you need it most. Rules differ by state, so talk to a licensed attorney in your state if you have questions.
If you already live in a cheap state
A low average can tempt you to drop to the minimum. The III warns that accidents often cost more than the minimum, and you pay the difference if you’re found at fault.
Here is an example. Say you live in California and cause a crash that hurts two people. Each one has $40,000 in medical bills, so $80,000 total. Your minimum policy pays up to $30,000 per person, or $60,000. You could owe the other $20,000 yourself. An umbrella policy for $1 million typically costs $200 to $300 a year, per the III.
Where the money goes
I have spent my career on the marketing side of this industry, so I know how these rankings get built. Many cheapest-state lists live on lead generation sites. Their job is to get your ZIP code and phone number, then sell that lead to agents or insurers. The ranking is the bait.
Quote ads work the same way. They lead with a low price that fits a narrow driver profile. Agents are often paid a commission tied to your premium, so their interest is not always the same as yours.
Ad budgets also shape what you see. State Farm wrote 18.7% of 2025 private auto premiums and Progressive wrote 18.6%, per NAIC data via III. Big brands buy the most ads. That is no reason to pick or skip them. Check any company’s complaint record and license with the NAIC Consumer Insurance Search.
Related: see signs you’re paying too much for car insurance, why auto insurance keeps going up and how much car insurance you actually need.
Seven moves to lower your rate in any state
- Pull your declarations page. Write down your limits, deductibles and the cars and drivers listed. You need this to compare quotes fairly.
- Get at least three quotes. The III suggests three as the minimum. Match the limits and deductibles across every quote.
- Price a higher deductible. Going from $200 to $500 could cut collision and comprehensive costs by 15% to 30%, per III. Going to $1,000 can save 40% or more. Example: if collision and comprehensive cost you $800 a year, a 15% to 30% cut is $120 to $240. Only pick a deductible you could pay tomorrow.
- Check if collision still makes sense. III suggests thinking about dropping it if the car is worth less than 10 times the premium. Example: you pay $600 a year for collision and comprehensive, and the car is worth $5,000. That is less than $6,000, so run the numbers.
- Ask about discounts by name. Ask about multi-policy, multi-car, low mileage, group plans and defensive driving. Florida (Statute 627.0652) and California (Insurance Code 11628.3) require a reduction for drivers 55 and older who finish a mature driver course the state recognizes. Each insurer sets the size.
- Fix your credit report. Dispute any errors before you shop, since credit-based scores affect rates in most states.
- Vet the company. Look up complaints and licensing in the NAIC search tool before you switch.
The final price matters more than how many discounts you get. A long discount list on a higher bill is still a higher bill.
What not to do
- Don’t let your coverage lapse while you shop. In California, your license can be suspended for up to four years if you’re in a collision without proper insurance, no matter who was at fault.
- Don’t drop to state minimums just to match a number you saw in a ranking.
- Don’t compare quotes with different deductibles as if they were the same.
Frequently asked questions
Which states have the cheapest car insurance?
The most recent federal-sourced data I use names the most expensive states for 2023: Florida, Louisiana and New York. The full state table is on the III auto insurance facts page. States with fewer uninsured drivers, like Maine, Utah and Idaho, carry less of that cost. Still, a state average is not your price. Three matched quotes will tell you more than any ranking.
Why did my rate go up if national insurance prices fell?
The BLS index tracks prices across the whole country. Your insurer prices you based on your ZIP code, your claims, your car and your record. Repair costs rose 5.8% over the 12 months ended September 2026, which can still push some bills up. Ask your insurer what changed, then shop with at least three companies before renewal.
Is minimum coverage enough if I live in a cheap state?
Often it isn’t. In 2024, the average bodily injury claim was $28,278, close to California’s $30,000 per-person minimum. One serious crash with more than one injured person can go past your limits, and you would owe the rest. Many drivers raise their liability limits first, then look at deductibles to keep the premium in check.
Does my credit score affect my car insurance price?
In most states, yes. The NAIC says insurers use credit-based insurance scores to set rates. In most states, an insurer can’t use the score as the only reason to raise your rate, deny you or cancel your policy. Check your free reports at AnnualCreditReport.com and dispute errors before you shop for new quotes.
Is there help for low-income drivers?
Some states run programs. California’s Low Cost Auto program offers liability coverage to income-eligible drivers. You can learn more at mylowcostauto.com or by calling 866-602-8861. Other states may have their own options. The NAIC auto insurance guide and your state insurance department are good places to check what help your state offers.
Your next step
Find your declarations page today and write down your limits and deductibles. Then get three matched quotes this week, before your renewal date. For more ways to cut costs, see 17 ways to lower your auto insurance rates.
Sources
- Insurance Information Institute: Facts + Statistics: Auto insurance
- U.S. Bureau of Labor Statistics: Consumer Price Index news release
- NAIC: Consumer Insurance Search
- NAIC: Credit-based insurance scores
- NAIC: Auto insurance consumer guide
- California Department of Insurance: New Year Means New Changes for Insurance
- Texas Department of Insurance: Auto insurance guide