Why is My Car Insurance So High?

Car insurance rates continue to climb, and drivers are feeling the dent in their wallets year after year. The national average cost of full coverage car insurance climbed 12 percent from 2024 to 2025, leaving many drivers wondering why coverage has gotten so expensive. Most states require drivers to carry some level of car insurance, but the rate you pay is influenced by a variety of personal factors. Understanding the influences behind your rate increase can help you determine why your rate is climbing and how to save on your premium.

Why is my auto insurance premium so high?

Between 2024 and 2025, full coverage auto insurance rates rose by 12 percent. As of August 2025, the national average is $2,679 per year, or $223 per month. This may cause you to wonder if you have done something to personally impact your rate. Keep in mind that your demographics and driving behavior can both affect your insurance premiums, and so will the type of vehicle you drive and your location.

Every company uses a different underwriting system to weigh and calculate your risk as a driver, so your premiums will likely vary from one company to the next. Here are some of the factors that may play into the rate quotes you receive.

Car insurance company

Many car insurance companies filed for rate increases in 2024, but the rate filings were much lower compared to the previous two years, according to S&P Global.

While average rates have risen in every state, the specific insurance company you purchase insurance from will determine how much you pay and how much you can save. Each insurance company has a proprietary underwriting system for calculating premiums. Although all insurance companies look at factors like vehicle type, driving history and location, carriers can weigh these factors differently, causing rates to vary between companies.

Additionally, not all car insurance companies offer the same discounts, and some companies may offer discounts that align more closely with your lifestyle. For example, if you are a parent with a student driver in your family, then you may want to look for companies that offer one or more student discounts. The best way to find the most affordable rate is to research different car insurance providers in your location and ask for a quote.

Coverage types and levels

The amount of insurance you carry can significantly impact your rate, and not only when comparing a liability-only policy to full coverage. Each state mandates its minimum coverage requirements, which differ vastly from one state to the next.

Depending on your state’s minimum insurance requirements, you may pay more for a minimum coverage policy than someone else in another state. Take the state minimum requirements for New York and California, for instance.

New York minimum requirements:

• $25,000 bodily injury liability per person and $50,000 death per person
• $50,000 bodily injury liability per accident and $100,000 death per accident
• $10,000 property damage liability per accident
• $50,000 personal injury protection (PIP)
• $25,000 statutory uninsured motorist bodily injury per person
• $50,000 statutory uninsured motorist bodily injury per accident

California minimum requirements:

• $30,000 bodily injury liability/death per person
• $60,000 bodily injury/death per accident
• $15,000 property damage liability per accident

If you are financing your vehicle, your lienholder will probably require you to carry comprehensive and collision, also known as full coverage. Many of the best car insurance companies also offer supplemental, optional riders, such as rental reimbursement, emergency road service and gap coverage.

Generally speaking, the more coverage you opt for, the higher your premium will be. It’s critical to balance price with protection, but purchasing a subpar policy to save money can cost you thousands (or more) in the long run if you are at fault in an accident. Rather than reducing or removing necessary coverage, you may want to review your policy for other savings opportunities.

Age

When insurers consider you a higher-risk driver, you typically face higher insurance premiums. Age is a significant factor when it comes to determining your risk because teen driver statistics show that new teenage drivers are more likely to get into an accident due to a lack of experience and more reckless driving habits than older drivers.

In fact, the average 18-year-old driver on their own policy pays about 121 percent more per year for full coverage compared to a 25-year-old driver. Elderly drivers, particularly those over 80, also have a higher risk of getting into an accident and typically face higher rates.

It is important to note that some states do not allow car insurance companies to use age as a rating factor, namely Hawaii. In Hawaii, a 25-year-old driver and a 50-year-old driver should pay the same or similar rates if all other factors are identical. Massachusetts also bans age as a rating factor, but insurers are able to use years of driving experience which can equate to similar pricing trends.

Geographic location

Insurance premium averages can vary by state, metro and even ZIP code due to factors like minimum coverage requirements, claim frequency, weather patterns and traffic density. If you live in a state prone to car accidents, theft, or weather damage resulting in more claims, the average insurance premium is likely higher. The average annual full coverage premium in Mississippi is $2,320, for example — much higher than the average annual premium in Maine at $1,631.

Driving record

Your driving record is one of the most significant car insurance rating factors. Insurance companies use actuarial data to calculate premiums. Statistically, drivers with speeding tickets and accidents as part of their driving history are more likely to engage in high-risk driving behavior in the future. Insurance companies rate this risk accordingly in their premium calculations.

For example, a driver with a single at-fault accident on their record pays an average full coverage car insurance rate of $3,857 — 44 percent higher than the average for a driver with a clean record.

How to get cheaper car insurance in 2025

While you could move to a state offering more affordable auto insurance coverage, this isn’t feasible for most, and there’s a possibility your age and other factors could still mean you’ll pay higher premiums.

The upside is that there are several other strategies worth trying to lower your car insurance costs. Start by improving your credit history if it’s on the poorer end, if credit is a permitted rating factor in your state. Also, practice safe driving habits, drive less (if possible), seek out discounts and consider raising your deductible.

Most importantly, shop around at different insurance companies to see which carrier will offer you the best rate. If you are in the market for a new car, you can also get a quote for a couple of different vehicles to see which one might result in the cheapest premium.

Improve your credit score

According to the Insurance Information Institute (Triple-I), insured drivers with lower credit-based insurance scores generally file more claims and are therefore a higher insurable risk. Taking the steps to improve your credit history may simultaneously improve your insurance premium, depending on your location, your insurance company, and how drastically your score improves.

Car insurance companies determine rates differently, so just because one company places a heavy weight on your credit history does not mean that another company will do the same. Furthermore, some states have banned or limited insurance companies from using credit as a rating factor, so depending on where you live, your credit record may not impact your premium at all. These states include California, Hawaii, Massachusetts and Michigan.

Since each provider calculates premiums differently, many insurance professionals recommend that you shop around for the best quote, even if you have lower-than-average or poor credit.

Practice good driving habits

A speeding ticket or other moving violation isn’t the end of the world, but it can have a negative impact on your wallet. In fact, just one speeding ticket conviction raises the average annual premium for full-coverage car insurance by $602 annually. At-fault accidents do even more damage, accounting for rate increases of $1,178 each year on average. And DUIs can almost double your premiums, costing the average driver $5,249 annually in insurance premiums for full coverage.

Consequently, practicing good driving habits and having a clear driving record is the most straightforward way of improving your insurance premium. If you have gotten several speeding tickets and have an accident or two, you have probably already seen your rate increase or expect a higher premium at your next renewal.

Some states offer defensive driver courses that can limit the number of points against your license and if the course is approved by your insurance company, you may be able to ask for a premium discount. Additionally, some companies offer accident forgiveness plans that would keep your auto insurance from going up after a first at-fault accident.

Lower your mileage

The less you use your vehicle, the lower your premium could be. Keeping your usage at or below the national average of 15,000 miles per year, or what auto insurers view as a favorable point, reduces the chances of being involved in an accident and reduces your risk profile. It’s worth looking into usage-based telematics and pay-per-mile programs, which benefit low-mileage drivers.

Beyond steering clear of accidents, there’s a hidden benefit that doesn’t directly impact your premiums. You’ll minimize the wear and tear on your car by driving it less, which means helping stave off potential costly repairs and potentially extending your vehicle’s use life.

Take advantage of discounts

Even though discount availability varies by state and insurance company, discounts are the quickest way to lower your premiums, regardless of your age, location, and driving history. When you are getting a quote, be sure to inquire what discounts may apply to your new or existing policy. There are many types of car insurance discounts, including:

• Bundling discounts
• Multi-car discounts
• Safe driver discounts
• Good student discounts
• Homeowner discounts
• Loyalty discounts
• New car discounts
• Anti-theft and safety restraint discounts
• Hybrid car discounts
• Employee/military discounts
• Pay-in-full or auto-pay discounts
• Defensive driving discounts
• Online/paperless discounts
• Low usage/mileage discounts
• Telematics discounts
• Senior discounts

Understanding what contributes to the cost of your insurance can help guide your financial decisions, driving behavior and how you approach looking for a provider. Although some aspects are beyond your control, you may find opportunities to lower your risk as a driver in the eyes of insurers and potentially obtain more affordable policies over time.

Bundle up

Multi-policy discounts are mentioned above. If you use more than one carrier for different forms of coverage, it may be worth consolidating to keep more of your hard-earned money in your pocket.

Consider getting quotes for coverages you carry from the providers you use that offer multi-policy discounts. You’re not obligated to move all your policies over to a single provider, but transferring just one or two could equate to sizable cost savings.

Raise your deductible

Your deductible, or the amount you pay out of pocket in the event of a comprehensive or collision claim, has a significant impact on your premiums. A lower deductible means lower out-of-pocket costs should you need to file a claim at the trade-off of a higher premium.

If you have the funds available, consider raising your deductible to lower your rate. The cost savings could be hundreds or more. But be sure that you aren’t putting yourself in a financial bind in the case of an accident should you need to file a claim with your auto insurance provider.

Shop around

Since there isn’t a standard car insurance rate that all companies use, some companies may offer more affordable prices than your current provider. By researching other car insurance companies in your location and asking for a quote, you’ll have a better understanding of how your current rate stands against the market.

If you find a company that offers a cheaper premium for the same level of coverage, it may be worth switching carriers. Be sure to ask about discounts that may not be advertised if you switch to ensure you’re getting the best rate the provider offers. Before choosing a new carrier, you should research how insurers handle claims and customer service issues, as well as their financial strength rating from AM Best.

Frequently asked questions

• Why did my car insurance rate go up?
  

  While auto insurance premiums are individualized, overall changes in the insurance industry can impact all policyholders. Your rate may have increased due to changes in your driving record or driving profile, such as receiving a speeding ticket or an increase in your annual mileage. If nothing has changed with your coverage selections or rating factors, your insurance company may have filed for permission to raise rates for all policyholders due to industry conditions.

  Over the past few years, the cost of vehicle parts and repairs has risen drastically due to escalating costs of replacement parts and labor shortages. With extreme weather and distracted driving claims increasing simultaneously, many insurance companies have filed for several rate increases. The primary reasons why insurers have filed for multiple rate increases in recent years are due to escalating accident severity, rising costs of repairs, rising costs of medical care and a spike in litigated bodily injury claims, according to the Triple-I.

  If you are unhappy with your current rate, you could shop your policy needs with other insurance providers or ask your agent about any available discount opportunities.

• I want to get a new car. Will my car insurance go up?
  

  Policyholders usually experience a rate increase when they purchase a newer car, but not always. In this situation, rate changes can depend on what type of car you are buying, if you are adding or replacing a vehicle, what coverage you need and if any other life changes need to be accounted for. For example, if you replace a luxury vehicle that is only a few years old with a safer, budget-friendly make and model, your rates may go down since the parts for your newer car are likely cheaper.

• What is the cheapest car insurance company?
  

  There is no one-size-fits-all answer to this question — your rate will vary depending on the insurance carrier. Knowing which risk factors may raise your rate can help you to seek out the best policy or discounts for your circumstances, though. For instance, young drivers may seek out companies that offer discounts for good students, since coverage typically costs more for those under 25. If you have filed multiple claims in recent years, you may look specifically for carriers that specialize in insuring high-risk drivers. And if you know your mileage will stay low, consider a usage-based telematics or pay-per-mile program that calculates your rate based on miles driven. Research is the key to identifying which company will provide the cheapest coverage for you.

• Are there any signs of rate improvements?
  

  While car insurance rates continue to trend upward, some states show signs of a more positive rate future for consumers. In Florida, the top five auto insurance groups, which account for nearly 80 percent of market share, have filed for average rate decreases this year of -6.5 percent due to legislative actions which reduced frivolous glass claim lawsuits year-over-year by 80 percent in 2024.

Methodology

Bankrate utilizes Quadrant Information Services to analyze August 2025 rates for all 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 single, 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 2023 Toyota Camry, commute five days a week and drive 12,000 miles annually. Bundling and paperless billing discounts are applied. 

These are sample rates and should only be used for comparative purposes. Your quotes will differ.

If otherwise specified, the base profile has been modified with the following driver characteristics: 

• Credit-based insurance scores
  

  Rates were calculated based on the following insurance credit tiers assigned to our drivers: “poor, average, good (base) and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. Four states prohibit or limit the use of credit as a rating factor in determining auto insurance rates: California, Hawaii, Massachusetts and Michigan.

• 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.

• Mileage
  

  Rates were calculated by evaluating our base profile with the following differences in mileage: 2K, 5K, 12K (base), 15K and 20K.

• Model
  

  Unless otherwise stated, rates are for 2023 vehicle models. For new vs. used vehicles, we included the following year in our calculations: 2013.

• Age
  

  Rates were calculated by evaluating our base profile with the ages 18-70 (base: 40 years) applied. Depending on age, drivers may be a renter or homeowner. Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations. For teen drivers, rates were determined by adding a 16- or 17-year-old teen to their 40-year-old married parents’ policy. The rates displayed reflect the total cost of a driver this age added to their parents’ policy.

• Gender
  

  The following states do not use gender as a determining factor in calculating premiums: California, Hawaii, Massachusetts, Michigan, North Carolina, Pennsylvania.

• Status
  

  Rates were evaluated based on the following marital/family status: single (base), married, 40-year-old married man and woman. Marital status is not a rating factor in Hawaii and Massachusetts.