Auto Insurance Coverage: Are Most Americans Fully Covered?

Car insurance is a fact of life for most Americans, but how many of them have full coverage? The answer may surprise you. According to recent studies, the vast majority of drivers in the United States have comprehensive and collision coverage on top of their liability insurance. In fact, 80% of insured drivers purchase comprehensive coverage, while 76% buy collision coverage. This means that a significant number of Americans are opting for more extensive car insurance policies to protect themselves financially in the event of an accident or vehicle damage.

Average auto insurance costs

The average cost of car insurance in the US varies depending on factors such as the type of coverage, location, age, driving record, and credit score. The national average cost for car insurance is $2,150 annually for full coverage, while the monthly average cost for drivers in the US is $190 for full coverage and $52 for minimum coverage.

The average auto insurance premium is $1,771 per year, or about $148 per month. The countrywide average auto insurance expenditure increased by 1.4% to $1,062 in 2021 from $1,046 in 2020. The average cost to own and operate a 2022 model vehicle was $10,728 in 2022 when it is driven 15,000 miles per year. The average full-coverage insurance cost for medium sedans was $1,694, compared with $1,529 for a medium SUV. The average insurance cost for all vehicles, including pickups and hybrid and electric vehicles, was $1,588.

The average auto insurance premium for a driver with good credit is $1,296 per year, or about $108 per month. For a driver with poor credit, the average cost is $4,064 per year, or about $339 per month.

The average cost of car insurance also varies by state. For example, the average annual cost of car insurance in Louisiana is $3,606, while in Vermont, it is $1,385.

Uninsured drivers

The Insurance Research Council (IRC) estimates that there are around 28 million uninsured drivers in the US, which equates to about one in eight drivers, or 12.6% of the country's driving population. This figure has decreased since 2017, when the national rate of uninsured drivers reached a nine-year high of 13.1%. However, in 2019, the average national rate of uninsured motorists was 12.6%, and 21 states, plus Washington, D.C., had uninsured motorist rates higher than this average.

The percentage of uninsured drivers varies significantly from state to state. Mississippi has the highest rate of uninsured drivers at 29.4%, while New Jersey has the lowest at 3.1%. Other states with notably high rates of uninsured drivers include Michigan (25.5%), Tennessee (23.7%), New Mexico (21.8%), and Washington (21.7%).

The high number of uninsured drivers is a concern for other motorists, as an accident with an uninsured driver can be very costly. Uninsured motorist coverage can help to protect against these costs, and it is mandatory in over 20 states. This type of insurance covers the cost of medical bills, repairs, fees, and other expenses resulting from a collision with an uninsured driver. However, even with this coverage, insurance companies in many states can increase rates after an uninsured motorist claim.

The main reasons given for driving without insurance are that it is unaffordable, or that the vehicle is inoperable or unused. However, other factors include having a poor driving record, which results in high premiums.

Protecting Yourself from Uninsured Motorists

There are several steps that drivers can take to protect themselves financially from uninsured motorists:

• Carry uninsured/underinsured motorist coverage.
• Consider an umbrella policy to cover any gaps in your insurance policy.
• Practise safe driving habits to avoid accidents.
• Compare quotes from multiple providers to find affordable insurance.

Insurance by state

The cost of car insurance varies across the United States, with a wide range of factors influencing the price of premiums. These factors include the driver's age, gender, driving experience, credit history, and location.

Most Expensive States for Full Coverage Auto Insurance

The most expensive state for auto insurance in 2023 was Michigan, with an average cost of $2,352 per year. New York also has high premiums, with an average annual cost of $2,996 for full coverage. Car insurance rates in New York City are even higher, at an average of $3,180 per year.

Least Expensive States for Full Coverage Auto Insurance

Maine offers the cheapest average premium at $876 per year, followed by Vermont, Idaho, New Hampshire, and Ohio. New Hampshire is the least expensive state for full coverage auto insurance, with an average annual cost of $1,390.

Most Expensive States for State-Minimum Car Insurance

New Jersey tops the list for the most expensive state-minimum car insurance, with an average annual cost of $1,237.

Least Expensive States for State-Minimum Car Insurance

South Dakota is the cheapest state for state-minimum car insurance, with an average cost of $381 per year.

The percentage of uninsured motorists also varies by state. Mississippi has the highest rate, with approximately 29% of drivers uninsured. In contrast, New Jersey has the lowest rate, with only 3% of drivers lacking insurance.

Comprehensive coverage

The cost of comprehensive coverage is typically based on the actual cash value of your vehicle, and you will be responsible for paying your selected deductible. Lenders may require you to carry comprehensive coverage when you finance or lease a vehicle, but it is not required by law in any state.

According to a Triple-I analysis of 2021 NAIC data, 80% of insured drivers in the United States purchase comprehensive coverage in addition to liability insurance. This coverage includes $100,000/$300,000 personal liability, $25,000 medical, $100,000 property, and $25,000/$50,000 uninsured/underinsured motorist coverage, with a $500 deductible for comprehensive claims.

Collision coverage

The average cost of collision coverage is about $290 per year, and it is usually purchased in addition to liability insurance. In 2022, 4.9% of collision insurance policyholders filed a claim, with the average collision claim amounting to $5,992.

When choosing collision coverage, it is important to consider factors such as the cost of your car, your willingness to pay for repairs under the deductible, and the desired level of protection for your vehicle. A higher collision deductible can lower your monthly premium but may put you at risk in the event of a costly accident.

Frequently asked questions