Sean Jackson
Car insurance rate hikes have shown no sign of slowing down. In Bankrate's study, it found car insurance rates increased on average by $625 annually, from January 2023 to January 2025. It represents a premium increase of more than 30%.
Car insurance rates are based on several factors, like your driving record, credit score and the model of vehicle being insured. Location also has a big impact on your overall rate. Car insurance rates vary from state to state, so how much you’ll pay ultimately depends on where you live, for better or worse.
Which states have incurred the highest car insurance increases? Price differences between states are based on several factors, like the following.
- Minimum coverage required: There are several types of car insurance, and some states mandate that your auto insurance policy have more coverage than others. In some states, you’ll only need liability coverage, but others require extra coverage such as uninsured motorist coverage and/or personal injury coverage, which can make your policy more expensive.
- The number of claims in the area from accidents or weather-related incidents: Typically, the more claims that are made in an area, the more expensive your insurance policy will be.
- Population or traffic density: The more people in an area, the more likelihood of accidents, which brings your rates up.
- Cost of living: The cost of vehicle repair and labor in your state can also affect how much your insurance rate is going to be.
If you're looking for auto insurance, our comparison tool — in partnership with Bankrate — will help you find the cheapest deals.
According to Bankrate, these are states experiencing the highest spikes in car insurance policies:
States with the highest average rate hikes
How to save on car insurance costs
- Shop around: Since different car insurance companies calculate rates differently, it’s important to shop around for the best deal among popular car insurance companies. Requesting quotes from various companies can help you choose the cheapest option available to you at your desired level of coverage. Plus, comparing quotes and reshopping your car insurance can also give you insight into whether or not you’re overpaying for your current coverage.
- Take advantage of insurance discounts: To save on auto insurance, be sure to take advantage of additional discounts offered by your insurance company that can help you save on your rate. Safe driving discounts, good student discounts, military and multiple policy discounts are some of the most common.
- Notify insurance of driving changes: If you retired or took a job working from home and don't drive as often, you might qualify for a low-mileage discount.
- Improve your credit: Since many car insurance companies use your credit score as a way to determine your rates, (with a few states as exceptions) having a high credit score can help you save.
- Increase your deductibles: Another way to save on car insurance is by increasing your deductibles. Just make sure you keep them at an affordable amount, in case you get in an accident and have to pay. Since your out-of-pocket expense goes up in the case of an accident, your premium will therefore be lower.
Will car insurance rates continue to increase?
It depends on many factors. Some states didn't receive spikes in car insurance premiums. Missouri's rates dropped by 11% in 2024, while Pennsylvania drivers received an average discount of 0.3%.
One factor to watch moving forward is the weather. If you live in an area prone to inclement events, that risk alone could keep costs high.
To demonstrate, Minnesota drivers paid 20% more for insurance in large part because of severe storms the previous year. Hail damage from those storms resulted in over a billion dollars in damages, according to Bankrate.
The bottom line
Insurance costs continue to climb in many areas of the country. There are many reasons for this from wildfires to flooding to hail storms and vehicle theft rings.
If you receive a renewal letter with a higher rate, shopping around is essential. It can help you ballpark how much your rate should be, and in some cases, help you save money.
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