Facts + Statistics: Auto insurance

Costs and expenditures

The countrywide average auto insurance expenditure increased 1.4 percent to $1,062 in 2021 from $1,046 in 2020, according to the National Association of Insurance Commissioners. In 2021 (the latest data available), the average expenditure was highest in New York ($1,511), followed by Louisiana ($1,500), and District of Columbia ($1,435).

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 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. The average expenditure measures what consumers actually spend for insurance.

Your Driving Costs, a 2022  study from AAA, found that 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. These cost estimates are based on a full coverage policy for a driver under 65 years of age with more than six years of driving experience, no record of accidents, and residency in a suburban/urban location.

80 percent of insured drivers purchase comprehensive coverage in addition to liability insurance, and 76 percent buy collision coverage, based on a Triple-I analysis of 2021 NAIC data.

The coverage is for a policy with $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 collision and comprehensive claims. These figures are not comparable with the National Association of Insurance Commissioners’ auto expenditures data, below.

Average Expenditures for Auto Insurance, 2012-2021

 

Year Average expenditure Percent change
2012 $812.40 2.2%
2013 841.06 3.5
2014 869.47 3.4
2015 896.66 3.1
2016 945.22 5.4
2017 1,008.35 6.7
2018 1,058.10 4.9
2019 1,071.74 1.3
2020 1,046.37 -2.4
2021 1,061.54 1.4

Source: National Association of Insurance Commissioners (NAIC). Further reprint or distribution strictly prohibited without written permission of NAIC.

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Auto insurance expenditures, by state

The tables below show estimated average expenditures for private passenger automobile insurance by state from 2016 to 2020 and provide 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 spend for insurance.

Expenditures are affected by the coverages purchased as well as other factors. The NAIC does not account for policyholder classifications, vehicle characteristics or the amount of deductibles selected by the policyholder, differences in state auto and tort laws, rate filing laws, traffic conditions and other demographic variables, all of which can significantly affect the cost of coverage. 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. Many other factors can also affect auto insurance prices.

Top 10 Most Expensive And Least Expensive States For Auto Insurance, 2021 (1)

 

Rank Most expensive states Average expenditure Rank Least expensive states Average expenditure
1 New York $1,511.04 1 North Dakota $691.50
2 Louisiana 1,500.38 2 Maine 712.97
3 District of Columbia 1,434.53 3 Iowa 725.30
4 Florida 1,431.56 4 Idaho 741.54
5 Rhode Island 1,422.42 5 Wisconsin 757.50
6 New Jersey 1,365.71 6 South Dakota 767.49
7 Michigan 1,306.32 7 Indiana 767.57
8 Georgia 1,268.34 8 Ohio 776.24
9 Nevada 1,264.70 9 North Carolina 780.19
10 Delaware 1,258.20 10 Vermont 780.45

(1) Based on average automobile insurance expenditures.

Source: National Association of Insurance Commissioners (NAIC). Further reprint or distribution strictly prohibited without written permission of NAIC.

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Auto Insurance Affordability

Louisiana, Florida and Michigan are the least affordable states for auto insurance, while Iowa is the most affordable state, according to a study from the Insurance Research Council (IRC). The report, Auto Insurance Affordability: Countrywide Trends and State Comparisons, looks at the auto insurance expenditure share of income, which ranges from a low of 1.02 percent in Iowa for 2018, the latest data available, to a high of 3.09 percent in Louisiana. U.S. households on average spent 1.67 percent of their income on auto insurance. The IRC developed an affordability index based on average auto insurance expenditures published by the National Association of Insurance Commissioners (NAIC) (see charts here) and median household income from the U.S. Census Bureau. According to the IRC, Louisiana, Florida, and Michigan have maintained their respective rankings as the first, second, and third least affordable states since 2014. The IRC notes that since the index is a ratio, some states with high average auto insurance expenditures rate lower on the affordability rankings because of higher-than-average median income (such as DC), while other states are pushed up the ranks of least affordable states by having low median household income (such as Mississippi). The analysis discusses the affordability of auto insurance for the overall population and does not address the issue of affordability among underserved populations.

Average Auto Insurance Expenditures As A Percent of Median Household Income, 2018 (1)

 

Rank State Percent Rank State Percent
1 Louisiana 3.09% 27 Oregon 1.43%
2 Florida 2.61 28 Montana 1.43
3 Michigan 2.43 29 Maryland 1.41
4 Mississippi 2.27 30 Alaska 1.40
5 Georgia 2.17 31 North Carolina 1.38
6 Rhode Island 2.14 32 Massachusetts 1.35
7 New York 2.12 33 Illinois 1.31
8 Nevada 2.04 34 Washington 1.30
9 Delaware 1.99 35 Ohio 1.29
10 Texas 1.93 36 Indiana 1.28
11 New Mexico 1.90 37 Kansas 1.26
12 South Carolina 1.90 38 Idaho 1.23
13 New Jersey 1.87 39 Minnesota 1.22
14 West Virginia 1.86 40 Utah 1.22
15 Arkansas 1.81 41 Wyoming 1.22
16 Alabama 1.81 42 Wisconsin 1.21
17 Kentucky 1.72 43 South Dakota 1.21
18 Arizona 1.68 44 Nebraska 1.18
19 Oklahoma 1.68 45 Maine 1.17
20 DC 1.67 46 Virginia 1.11
21 Connecticut 1.67 47 Vermont 1.11
22 Colorado 1.55 48 Hawaii 1.04
23 Pennsylvania 1.54 49 New Hampshire 1.04
24 Tennessee 1.53 50 North Dakota 1.03
25 Missouri 1.48 51 Iowa 1.02
26 California 1.47   Total U.S. 1.67%

(1) Data are for IRC's affordability index based on average auto insurance expenditures published by the National Association of Insurance Commissioners (NAIC) (see charts here) and median household income from the U.S. Census Bureau.

Source: Auto Insurance Affordability: Countrywide Trends and State Comparisons, Insurance Research Council.

Premiums

Private Passenger Automobile Insurance, 2013-2022

($000)

  Liability Collision/comprehensive
Year Net
premiums
written (1)
Annual
percent
change
Combined
ratio (2)
Annual
point
change (3)
Net
premiums
written (1)
Annual
percent
change
Combined
ratio (2)
Annual
point
change (3)
2013 $107,446,382 3.9% 103.6 0.4 pts. $67,452,663 4.4% 98.7 -1.5 pts.
2014 112,354,903 4.6 103.8 0.2 71,096,640 5.4 100.2 1.5
2015 116,305,809 3.5 107.9 4.2 76,486,433 7.6 99.4 -0.8
2016 124,439,721 7.0 109.4 1.5 82,931,826 8.4 101.5 2.1
2017 133,745,174 7.5 105.5 -3.9 88,489,745 6.7 98.3 -3.2
2018 144,450,175 8.0 100.5 -5.0 96,475,072 9.0 93.7 -4.6
2019 147,289,907 2.0 101.6 1.1 100,438,313 4.1 94.6 0.9
2020 144,115,139 -2.2 94.8 -6.7 99,607,381 -0.8 89.2 -5.3
2021 148,424,321 3.0 100.4 5.6 104,486,659 4.9 104.1 14.8
2022 154,937,129 4.4 111.2 10.8 112,472,781 7.6 113.7 9.7

(1) After reinsurance transactions, excludes state funds.
(2) After dividends to policyholders. A drop in the combined ratio represents an improvement; an increase represents a deterioration.
(3) Calculated from unrounded numbers.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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Top 10 Writers Of Private Passenger Auto Insurance By Direct Premiums Written, 2023

($000)

Rank Group/company Direct premiums written (1) Market share (2)
1 State Farm $57,973,413 18.3%
2 Progressive 48,255,875 15.2
3 Berkshire Hathaway Inc. 38,920,127 12.3
4 Allstate Corp. 32,848,169 10.4
5 USAA Insurance Group 19,806,751 6.2
6 Liberty Mutual 13,312,836 4.2
7 Farmers Insurance Group of Companies 13,221,687 4.2
8 American Family Insurance Group 6,790,423 2.1
9 Travelers Companies Inc. 6,578,946 2.1
10 Nationwide Mutual Group 5,413,758 1.7

(1) Before reinsurance transactions, includes state funds.
(2) Based on U.S. total, excluding territories.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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Auto claims

Liability insurance pays for the policyholder’s legal responsibility to others for bodily injury or property damage. Collision and comprehensive insurance cover property damage and theft to the policyholder’s car.

Private Passenger Auto Insurance Losses, 2013-2022 (1)

 

  Liability
  Bodily injury (2) Property damage (3)
Year Claim frequency (4) Claim severity (5), (6) Claim frequency (4) Claim severity (5), (6)
2013 0.95  $15,441   3.55  $3,231 
2014 0.97   15,384   3.41   3,516 
2015 0.89   17,014   3.45   3,628 
2016 1.04   16,082   3.41   3,969 
2017 1.06   16,234   3.16   3,797 
2018 1.05   17,451   3.04   3,924 
2019 1.01   18,443   3.03   4,061 
2020 0.85   19,965   2.27   4,450 
2021 0.72   23,172   2.12   4,710 
2022 0.74   24,211   2.37   5,313 
  Physical damage (7)
  Collision Comprehensive (8)
Year Claim frequency (4) Claim severity (5) Claim frequency (4), (9) Claim severity (5), (9)
2013 5.71  $3,144   2.57  $1,621 
2014 5.93   3,169   2.79   1,572 
2015 6.01   3,377   2.62   1,679 
2016 5.51   3,454   2.30   1,951 
2017 5.98   3,517   2.86   1,811 
2018 5.99   3,661   3.01   1,834 
2019 5.96   3,826   3.23   1,778 
2020 4.49   3,709   2.94   1,995 
2021 4.46   5,136   3.20   2,132 
2022 4.88   5,992   3.31   2,738 

(1) For all limits combined. Data are for paid claims.
(2) Excludes Massachusetts and most states with no-fault automobile insurance laws.
(3) Excludes Massachusetts, Michigan and New Jersey.
(4) Claim frequency is claims per 100 earned car years. A car year is equal to 365 days of insured coverage for one vehicle.
(5) Claim severity is the size of the loss.
(6) Includes loss adjustment expenses.
(7) Excludes Massachusetts, Michigan and Puerto Rico. Based on coverage with a $500 deductible.
(8) Excludes wind and water losses.
(9) Includes glass losses.

Source: ISO®, a Verisk Analytics® business.

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  • In 2022, 0.7 percent of people with liability insurance had a bodily injury liability claim, while 2.4 percent of those with liability insurance had a property damage liability claim, according to ISO. 

  • In 2022, 4.9 percent of collision insurance policyholders had a claim, while 3.3 percent of people with comprehensive coverage had a claim. 

  • In 2022, the average auto liability claim for property damage was $5,313; the average auto liability claim for bodily injury was $24,211. 

  • In 2022, the average collision claim was $5,992; the average comprehensive claim was $2,738. 

Incurred Losses For Auto Insurance, 2018-2022 (1)

($000)

  2018 2019 2020 2021 2022
Private passenger auto          
     Liability $91,736,331 $96,183,910 $81,622,211 $96,103,658 $117,875,684
     Physical damage 58,766,743 62,636,230 54,684,357 73,849,765 91,020,987
Commercial auto          
     Liability 17,810,709 20,402,267 19,315,713 21,125,756 26,341,725
     Physical damage 4,999,100 5,395,145 4,813,714 5,771,405 7,692,547
Total $173,312,883 $184,617,552 $160,435,995 $196,850,584 $242,930,943

(1) Losses occurring within a fixed period, whether or not adjusted or paid during the same period, after reinsurance transactions.

Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

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The shared/residual market and nonstandard markets

All states and the District of Columbia use special systems to guarantee that auto insurance is available to those who cannot obtain it in the private market. These systems are commonly known as assigned risk plans. Assigned risk and other plans are known in the insurance industry as the shared, or residual, market. In assigned risk plans, high-risk policyholders are proportionally assigned to insurance companies doing business in the state. In the voluntary, or regular, market, auto insurers are free to select policyholders.

Motorists can also obtain auto insurance from the nonstandard portion of the private market. The nonstandard market is a niche market for drivers who have a worse than average driving record or drive specialized vehicles such as high-powered sports cars or custom-built cars. It is made up of both small specialty companies, whose only business is the nonstandard market, and well-known auto insurance companies with nonstandard divisions.

Collision losses

The chart below shows the claim frequency and average loss payment per claim and average loss payment per insured vehicle year under collision coverage for recent model vehicles. The claim frequency is expressed as a rate per 100 insured vehicle years. A vehicle year is equal to 365 days of insurance coverage for a single vehicle.

Passenger Vehicle Collision Coverage Insurance Losses, 2020-2022 Model Years

 

  Claim frequency (1) Claim severity Overall loss (2)
Passenger cars (3) 7.5 $8,759 $655
Pickups 5.5 8,606 472
SUVs 5.6 8,755 486
All passenger vehicles (4) 6.1 $8,739 $532

(1) Per 100 insured vehicle years.
(2) Represents the average loss payment per insured vehicle year.
(3) Includes minivans.
(4) Includes claims from cargo/passenger vans.

Source: Highway Loss Data Institute.

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Consumer prices

To shed light on inflation, the Bureau of Labor Statistics maintains a consumer price index (CPI) which tracks monthly and annual changes in the average prices paid by urban consumers for a representative basket of goods and services. The Consumer Price Index for All Urban Consumers (CPI-U) represents data for 93 percent of the U.S. population not living in remove rural areas, institutions, or on military bases. The CPI-U rose 4.1 percent in 2023. The cost of motor vehicle insurance for these consumers increased 17.4 percent in 2023 while the cost of used cars and trucks decreased -7.1 percent.

Consumer Price Indices For Insurance And Related Items And Annual Rates Of Change, 2014-2023

(Base: 1982-84=100)

  Cost of living (all items) Motor vehicle insurance Medical care items Physicians' services Hospital services (1)
Year Index Percent change Index Percent change Index Percent change Index Percent change Index Percent change
2014 236.7 1.6% 437.2 4.2% 435.3 2.4% 359.1 1.4% 278.8 5.0%
2015 237.0 0.1 460.6 5.4 446.8 2.6 366.1 1.9 290.1 4.1
2016 240.0 1.3 489.1 6.2 463.7 3.8 378.1 3.3 303.3 4.5
2017 245.1 2.1 526.9 7.7 475.3 2.5 380.1 0.5 318.2 4.9
2018 251.1 2.4 566.0 7.4 484.7 2.0 380.5 0.1 332.2 4.4
2019 255.7 1.8 571.0 0.9 498.4 2.8 383.2 0.7 338.8 2.0
2020 258.8 1.2 544.6 -4.6 518.9 4.1 389.9 1.7 353.0 4.2
2021 271.0 4.7 565.3 3.8 525.3 1.2 406.5 4.3 363.5 3.0
2022 292.7 8.0 609.8 7.9 546.6 4.1 411.9 1.3 376.8 3.7
2023 304.7 4.1 716.0 17.4 549.1 0.5 412.6 0.2 392.1 4.1
Percent change
2014-2023
  28.7%   63.8%   26.1%   14.9%   40.7%

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Consumer Price Indices For Insurance And Related Items And Annual Rates Of Change, 2014-2023 (Cont'd)

(Base: 1982-84=100)

  Motor vehicle body work New vehicles New cars New trucks (2)
Year Index  Percent change Index  Percent change Index  Percent change Index  Percent change
2014 278.0 2.6% 146.3 0.3% 144.5 -0.3% 153.6 1.1%
2015 280.8 1.0 147.1 0.6 144.4 -0.1 155.4 1.2
2016 287.6 2.4 147.4 0.2 143.7 -0.5 156.4 0.6
2017 294.5 2.4 147.0 -0.2 142.7 -0.7 156.6 0.1
2018 302.7 2.8 146.3 -0.5 142.0 -0.5 155.8 -0.5
2019 313.5 3.5 146.8 0.4 142.8 0.6 156.3 0.3
2020 324.7 3.6 147.6 0.5 144.0 0.8 157.1 0.5
2021 343.0 5.6 156.2 5.9 152.0 5.6 166.7 6.1
2022 385.9 12.5 172.5 10.4 168.8 11.1 183.7 10.2
2023 411.2 6.6 178.9 3.7 174.6 3.5 190.8 3.9
Percent change
2014-2023
  48.0%   22.3%   20.9%   24.2%

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Consumer Price Indices For Insurance And Related Items And Annual Rates Of Change, 2014-2023 (Cont'd)

(Base: 1982-84=100)

  Used cars and trucks Tenants and
household insurance (3), (4)
Repair of
household items (3), (5)
Legal services (6) Existing single-
family homes
Year Index  Percent change Index  Percent change Index  Percent change Index  Percent change Median price ($000)  Percent change
2014 149.1 -0.5% 141.9 4.8% 212.4 2.8% 318.5 2.1% 208.3 5.7%
2015 147.1 -1.3 146.4 3.2 220.1 3.6 323.6 1.6 223.9 7.5
2016 143.5 -2.5 147.7 0.9 226.3 2.8 334.5 3.4 235.5 5.2
2017 138.3 -3.6 148.8 0.7 239.3 5.8 346.4 3.6 248.8 5.6
2018 138.4 0.1 150.7 1.3 253.7 6.0 361.2 4.3 261.6 5.1
2019 139.8 1.0 151.8 0.7 268.7 5.9 364.8 1.0 274.6 5.0
2020 144.2 3.2 151.1 -0.5 270.0 0.5 368.7 1.1 300.2 9.3
2021 182.6 26.6 150.7 -0.3 N/A NA 374.4 1.5 357.1 19.0
2022 205.9 12.7 150.5 -0.1 N/A NA 399.4 6.7 392.8 10.0
2023 191.2 -7.1 153.3 1.8 352.6 NA 432.9 8.4 394.6 0.5
Percent change,
2014-2023
  28.3%   8.0%   66.0%   35.9%   89.4%

(1) December 1996=100.
(2) December 1983=100.
(3) December 1997=100.
(4) Only includes insurance covering rental properties.
(5) Includes appliances, reupholstery and inside home maintenance.
(6) December 1986=100.

NA = Data not available

Note: Percent changes are calculated from unrounded data.

Source: U.S. Department of Labor, Bureau of Labor Statistics; National Association of Realtors.

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