National Average Cost for Car Insurance Skyrockets 26% From Last
Year, Averaging $2,543
Drivers in Detroit spend the largest share of income on auto insurance each year, while Seattle
drivers spend the least
NEW YORK - February 5, 2024 - Despite a slowdown in inflation across various
sectors, car insurance costs are skyrocketing in 2024, according to Bankrate’s annual
True Cost of Auto Insurance Report.
● The national average cost for full coverage car insurance is $2,543 per year,
which is 3.41% of the median household income. This surge is up from $2,014 in
2023 and $1,771 in 2022.
● The percentage of income spent on auto insurance varies among
metro-statistical areas, with Detroit drivers facing an average annual expense of
$5,687 for full coverage car insurance (7.98% of their median household
income), while Seattle drivers spend an average of $1,759 per year on full
coverage car insurance (1.65% of their median household income).
● The national average premium for drivers with poor credit scores is $4,338 for full
coverage insurance, which is about $1,795 more than drivers with good credit
with the same level of coverage.
● Adding a teen driver to a policy can be the most expensive life event for auto
insurance consumers, costing drivers an average increase of $2,878, a 21.03%
increase from 2023. This brings the average auto insurance premium for these
drivers to $5,421, up 23.43% from 2023.
*Rates for adding a teen driver are based on a married couple with a 16-year-old driver
on their full coverage policy.
For the full report, click here:
https://www.bankrate.com/insurance/car/the-true-cost-of-auto-insurance-in-2024/
Bankrate analyzed the average total percentage of household income spent on car
insurance to determine the true cost of car insurance for 26 metro-statistical areas
(MSAs).
Most and Least Expensive Metros for Auto Insurance
True Cost
Rank*
Metro Statistical
Area (MSA)
Average
Premium
% of Household
Income Spent on
Car Insurance
Least Expensive
Metros
1
Seattle
$1,759
1.65%
2
Boston
$2,094
2.01%
3
Washington D.C.
$2,430
2.07%
4
Portland
$1,976
2.21%
5
Minneapolis
$2,044
2.24%
Most Expensive
Metros
22
Las Vegas
$3,626
5.12%
23
Philadelphia
$4,753
5.65%
24
Tampa
$4,078
5.89%
25
Miami
$4,213
5.95%
26
Detroit
$5,687
7.98%
*Bankrate utilized current data from Quadrant Information Services to understand the average cost of
auto insurance for every U.S. state and metro statistical area. Each location was assigned a “True Cost
Rank” — a score between one and 50 for states and one and 26 for most populous metro areas. The
lower the ranking, the smaller percentage of total income drivers spend on car insurance premiums.
“The rate of full coverage car insurance increased 26 percent from 2023, and while we
hope to see rates stabilize soon, that likely won't happen until at least 2025,” said
Bankrate Analyst Shannon Martin. “While inflation is slowing down, insurance
companies are reassessing their risk models to account for the post-pandemic rise in
car crashes, the increase of claims from extreme weather and the sustained elevated
cost of vehicle repairs. Remember that base rate increases can only be implemented at
the renewal period, so some policyholders are still paying for the increase from 2023
and have yet to be hit with potentially higher 2024 rate renewals.”
Bankrate’s True Cost of Auto Insurance Report outlines how everyday life events impact auto
insurance premiums in all 50 states and the top 26 largest metro-statistical areas. While adding
a teen driver to a policy is notably the most expensive life event for drivers (adding $2,878 to the
average annual premium), other life events such as being involved in a car accident, getting a
speeding ticket and decreasing credit scores can add up quickly as well:
Most and Least Expensive Metros for “Life Event” Premium Changes:
Life Event
Added Average
Cost in the U.S.
Added Cost to
Premium in
Most
Expensive Metro
Added Cost to
Premium in
Least
Expensive Metro
Credit score decreases from
‘good’ to ‘poor’
$1,795
New York - $5,305
Seattle - $306**
Receives a speeding ticket
$523
Detroit - $1,489
San Antonio -
$269
Involved in a car accident
$1,034
Detroit - $2,849
New York - $494
Has a lapse in auto insurance
coverage
$276
Tampa - $818
Charlotte - $117**
Convicted of a DUI
$2,247
Detroit - $8,585
Washington, D.C.
- $1,171
Adds a teenage driver to policy
$2,878
Detroit - $8,366
Minneapolis -
$2,049
**These locations are part of states that prohibit or have prohibited auto insurance carriers from changing
premiums in the past year due to these life events. Rates may be affected due to state laws changing.
“We are seeing especially high rate increases when drivers engage in high-risk behavior
like speeding or causing an accident,” added Martin. “For example, drivers in Charlotte
pay, on average, $5,069 more per year for full coverage car insurance with a DUI on
their record than drivers with a clean record. Asking about discounts and comparison
shopping your policy may help you find a lower rate, but focusing on long-term financial
impacts, such as improving your driving record and boosting your credit score (in most
states), may also pay off down the line.”
Methodology
Bankrate utilizes Quadrant Information Services to analyze 2024 rates for ZIP codes
and carriers in all 50 states and Washington, D.C. Rates are weighted based on the
population density in each geographic region. Quoted rates are based on a 40-year-old
male and female driver with a clean driving record, good credit and the following full
coverage limits:
$100,000 bodily injury liability per person
$300,000 bodily injury liability per accident
$50,000 property damage liability per accident
$100,000 uninsured motorist bodily injury per person
$300,000 uninsured motorist bodily injury per accident
$500 collision deductible
$500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets
each state’s requirements. Our base profile drivers own a 2022 Toyota Camry, commute
five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
Credit-based insurance scores: Rates were calculated based on the following
insurance credit tiers assigned to our drivers: “poor, average, good (base) and
excellent.” For ‘credit score decreased,’ rates were assessed when the drivers’ score
went from ‘good’ to ‘poor.’ Insurance credit tiers factor in your official credit scores but
are not dependent on that variable alone. Four states prohibit or restrict the use of
credit-based insurance scores as a rating factor in determining auto insurance rates:
California, Hawaii, Massachusetts, and Michigan. In Michigan, insurers are allowed to
use information that contributes to your credit score but not the score itself.
Incidents: Rates were calculated by evaluating our base profile with the following
incidents applied: clean record (base), at-fault accident, single speeding ticket, single
DUI conviction and lapse in coverage.
Model: To determine cost by vehicle type, we evaluated our base profile with the
following vehicles applied: BMW 330i, Ford F-150, Honda Odyssey, Toyota Prius and
Toyota Camry (base).
Teens: Rates were determined by adding a 16-year-old teen to a 40-year-old married
couple’s policy. Age is not a contributing rating factor in Hawaii and Massachusetts due
to state regulations, although Massachusetts allows insurers to use a driver’s years of
driving experience.
Income data: Median annual income data was calculated using 2022 data, the most
recent available, provided by the U.S. Census Bureau. 2024 calculations for the
percentage of income spent on auto insurance use the most recent median income data
from the U.S. Census. All previous True Cost of Auto Insurance reports utilized average
income data from the U.S. Census. Bankrate chose to switch to median income data in
2024 as a more representative statistic of what people earn in a given geographic area.
About Bankrate:
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Julie Guacci
Public Relations Manager, Bankrate
917-368-8673
