Facts + Statistics: Auto insurance

Costs and expenditures

The countrywide average auto insurance expenditure rose 3.3 percent to $841.23 in 2013 from $814.63 in 2012, according to a January 2016 report from the National Association of Insurance Commissioners. In 2013 (the latest data available), the average expenditure was highest in New Jersey ($1,254.10), followed by the District of Columbia ($1,187.49), and New York ($1,181.86).

To calculate average expenditures the National Association of Insurance Commissioners (NAIC) assumes that all insured vehicles carry liability coverage but not necessarily collision or comprehensive coverage. The average expenditure measures what consumers actually spend for insurance on each vehicle. It does not equal the sum of liability, collision and comprehensive expenditures because not all policyholders purchase all three coverages.

AAA’s 2016 Your Driving Costs study found that the average cost to own and operate an average sedan was $8,558 in 2015, down 1.6 percent from $8,698 in 2014. The decline reflects reduced gasoline costs offsetting increases in maintenance, insurance, finance charges and other costs. Average insurance costs for sedans rose 9.6 percent, or $107, to $1,222 in 2015 from $1,115 in 2014. AAA insurance cost estimates are based on a full coverage policy for a 47-year old male with a clean driving record for a policy with $100,000/$300,000 bodily injury liability coverage with a $500 deductible for collision and a $100 deductible for comprehensive coverage. Figures are not comparable with the National Association of Insurance Commissioners’ Auto Expenditures data below.

Auto insurance expenditures, by state

The tables on the following pages show estimated average expenditures for private passenger automobile insurance by state from 2010 to 2014, providing approximate measures of the relative cost of automobile insurance to consumers in each state. To calculate average expenditures the National Association of Insurance Commissioners (NAIC) assumes that all insured vehicles carry liability coverage but not necessarily collision or comprehensive coverage. The average expenditure measures what consumers actually spend for insurance on each vehicle. It does not equal the sum of liability, collision and comprehensive expenditures because not all policyholders purchase all three coverages.

Expenditures are affected by the coverages purchased as well as other factors. In states with a healthy economy, people are more likely to purchase new cars. Since new car owners are more likely to purchase physical damage coverages, these states will have a higher average expenditure. The NAIC notes that three variables—urban population, miles driven per number of highway miles, and disposable income per capita—are correlated with the state auto insurance premiums.  It also notes that high-premium states tend to also be highly urban, with higher wage and price levels, and greater traffic density. Other factors can also affect auto insurance prices.