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Why is car insurance so expensive for someone living in a certain state, but much more affordable for the same person if they move to a different state?
There are many reasons for this significant imbalance, but the main issue comes down to state laws, litigation and claims costs, local risk factors and the cost of living in the area.
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Just as rent is much higher in Manhattan than it is in Milwaukee, so is car insurance. But that comparison only goes so far. Rent comes down to population density, amenities and location desirability, yet car insurance is more expensive in even the least desirable part of Florida than it is basically anywhere else in the U.S.
Inflation isn’t helping the situation, either — a MoneyGeek report analyzing 83,056 quotes from 46 companies across 473 ZIP codes found that average car insurance prices have increased 11.3% in 2025, and by 57% since 2022 (1).
So, which states are the most and least expensive — and what can you do to ensure your rates are competitive without moving to another state?
Top 10 most expensive
According to MoneyGeek’s findings, these are the top ten most expensive states for car insurance in 2025:
- Florida: $2,912
- Louisiana: $2,827
- New Jersey: $2,160
- Delaware: $2,149
- District of Columbia: $1,963
- California: $1,861
- Nevada: $1,826
- Maryland: $1,802
- Texas: $1,799
- Colorado: $1,754
It’s no surprise to see Florida taking the top spot with a yearly average charge of $2,912 — Florida’s constant hurricanes, highest population of seniors in the U.S. and dense tourist traffic mean claims are submitted often. Florida also requires drivers to have Personal injury protection (PIP) insurance, which makes up nearly 20% of auto insurance premiums in the state (2), and suffers from a high crime rate, with 46,213 cars stolen in 2023 (3).
Louisiana lands in the second most expensive spot, at $2,827. While hurricanes are also a factor here, the Washington Post noted that the laws in Louisiana make it more expensive to resolve whose insurance should pay after a car crash (4). The state recently passed tort reform, meaning drivers who are more than 50% at fault can’t claim payment.
New Jersey is the third most expensive, yet at $2,160, its average is still $667 less than Louisiana and $752 less than Florida per year. Factors like weather — New Jersey experienced 74 climate disaster events between 1980 and 2024 (5) — an increase in minimum liability insurance from $15,000 to $25,000 in 2023 (6) and its proximity to heavily populated Manhattan all affect the current price. New Jersey is also a “no fault” state, meaning each driver’s insurance provider must cover their medical expenses regardless of who’s at fault.
If you’re living in one of these states, it could pay to shop around for insurance every year or so to ensure you still have the best rate available to you. Anytime your provider tells you they are increasing the premium, it’s time to start looking for quotes elsewhere.
OfficialCarInsurance.com can help you easily compare quotes from multiple insurers like Progressive, Allstate and GEICO so you can find the cheapest price available to you. How it works is simple: Just enter some basic information, like your ZIP code and the make and model of your car, and OfficialCarInsurance.com will connect you with potential providers.
Depending on factors like your driving history and location, you could find rates as low as $29 per month.
Keep in mind that, in most cases, you can change your insurance before it’s up for renewal. Just keep an eye out for any early cancellation fees.
Read more: Warren Buffett used 8 simple money rules to turn $9,800 into a stunning $150B — start using them today to get rich (and then stay rich)
Top 10 cheapest
If you’re hoping to avoid egregious car insurance premiums, and you don’t mind moving to a new state to enjoy the lower rates, these are the top ten cheapest states for car insurance in 2025:
- Vermont: $902
- Maine: $908
- Idaho: $952
- Hawaii: $983
- New Hampshire: $984
- Wyoming: $984
- Ohio: $990
- Indiana: $1,009
- Wisconsin: $1,038
- North Dakota: $1,078
But if living in a quiet, low-density state like Vermont or Idaho doesn’t quite do it for you, there are ways to ensure you’re still receiving the best rate possible while staying in the city and state you currently call home.
How you can avoid insurance creep
While you can’t control the various local rules and regulations that make the exact same insurance policy in Florida much more expensive than it is in Vermont, you can control some of the other factors that providers use to decide on your rate — like your credit score, your driving record and the car you drive. Cars with higher safety ratings, lower repair costs and theft rates are cheaper to insure than flashy sports cars.
If your car is old and no longer worth much, you can also consider dropping collision and comprehensive coverage, since you may pay more for the insurance than the car is worth. Paying only for the legally required liability insurance could dramatically reduce your premium.
It can also be easy to miss a notification from your insurer that they’re increasing your rate after initially reeling you in with a good deal, but if you’re following a budget every month, you’ll be much more likely to notice the bait and switch and do something about it.
If managing a budget feels overwhelming to you, apps like Rocket Money can simplify the process.
Rocket Money tracks and categorizes your expenses, providing a clear view of your cash, credit and investments in one place. It can even uncover forgotten subscriptions, helping you cut unnecessary costs and save potentially hundreds annually.
For a small fee, the app can also negotiate lower rates on your monthly bills, making it a valuable tool for keeping your finances on track.
Once you’ve reduced your costs — whether from moving states or aggressive budgeting — it’s time to start thinking about the future. The money you save from budgeting and saving on insurance can be a great target for supporting your long-term goals, whether that’s retirement or an emergency fund to absorb unexpected insurance costs.
An easy way to get started squirreling away your spare change is with a robo advisor like Acorns.
How it works is simple: Every time you make a purchase on a linked debit or credit card Acorns rounds up the difference and invests it in a smart portfolio tuned to your risk tolerance. That $4.25 coffee every morning? It’s now a 75-cent investment in your future.
With consistent contributions to blue-chip ETFs like VOO, which tracks the S&P 500, Acorns ensures your money can grow steadily, and your spare change can be a real contributor to your financial security.
But if saving your spare change isn’t enough, Acorns also lets you set up recurring monthly contributions for your portfolio. Even better, if you sign up with just a $5 monthly deposit Acorns will give you $20 to get your investment journey off on the right foot.
After building up your confidence through automated investing, you could then consider getting high-quality investment advice delivered straight to you through services like Moby.
Moby’s team of experts use AI-backed insights to carefully select between one and three stocks for your consideration every week. Recommendations are delivered to you in simple, easy-to-understand language — no overbearing financial jargon here.
Even better, in four years, across almost 400 stock picks, Moby’s recommendations have beaten the S&P 500 by almost 12%, on average. With their easy-to-understand format, you can become a smarter investor in just five minutes, all with their 30-day money-back guarantee.
Plus, you can test out Moby for free with a 7-day trial when you register now. That way, you can try before you buy.
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Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Moneygeek (1); Florida Office of Insurance Regulation (2); Insurance Information Institute (3); The Washington Post (4); National Centers for Environmental Information (5); WHYY (6)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.