Auto Insurance: What It Actually Costs and Why 1 in 3 Drivers Can't Pay for a Crash
Kenneth Schaub, Owner & Licensed Insurance Advisor
Full-coverage auto insurance now averages $2,578 a year nationally, though real premiums vary enormously by state, from under $1,700 a year in Vermont to nearly $4,900 in Nevada.
How much does car insurance actually cost in 2026?
- National average, full coverage: $2,578/year
- Lowest state (Vermont): $1,546-$1,660/year
- Highest state (Nevada): $4,889/year
- Also high: Louisiana ($4,180/year), Florida ($3,852/year)
Most states require a minimum of 25/50/25 ($25,000 per person, $50,000 per accident bodily injury, $25,000 property damage), though requirements vary significantly: Florida uses a PIP-only $10,000 structure, while Alaska, Maine, Michigan, North Carolina, and Virginia require 50/100/50. New Jersey raised its minimum to 35/70/25 effective January 1, 2026.
| Liability-only | Full coverage | |
|---|---|---|
| Covers damage you cause to others | Yes | Yes |
| Covers damage to your own vehicle | No | Yes (collision + comprehensive) |
| Required by most states | Yes (state minimum) | No, unless the car is financed or leased |
| Typical annual cost | A fraction of full coverage | $2,578/year national average |
How many drivers on the road actually can't pay for the damage they cause?
More than most people assume. 15.4% of U.S. drivers were uninsured in 2023, up from 11.6% in 2019. Add in underinsured drivers (18%), and roughly 1 in 3 U.S. drivers (33.4%) is uninsured or underinsured, a 10-point jump since 2017. Mississippi has the worst rate at 28.2% uninsured; Maine has the best at 5.7%. This is exactly why uninsured/underinsured motorist coverage matters: it protects you against roughly a one-in-three chance that the other driver in a crash simply can't pay for what they caused.
Does my credit score actually affect my car insurance rate?
In most states, yes, significantly. Credit-based insurance scores weigh payment history (about 40%), outstanding debt (about 30%), and credit history length (about 15%). In 2026, drivers with poor credit pay an average of $202 a month, compared to $120 a month for drivers with excellent credit, a gap of nearly $1,000 a year for otherwise identical coverage. California, Hawaii, Massachusetts, and Michigan ban the practice entirely, so this only applies depending on where you live.
What should I actually carry given how many drivers are uninsured?
Given that roughly a third of drivers can't fully cover a crash they cause, uninsured/underinsured motorist coverage at limits matching your own liability coverage is worth carrying even where it's not required. State-minimum liability limits, 25/50/25 in most states, are also notably low relative to real medical and vehicle repair costs today, worth discussing with your advisor rather than defaulting to the legal minimum simply because it's legal.
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Frequently asked questions
What happens if I get into an accident with an uninsured driver?
Without uninsured motorist coverage, you'd generally need to pursue the other driver directly for damages, often difficult if they're uninsured in the first place. Given that roughly 1 in 3 drivers is uninsured or underinsured, this coverage is worth carrying even where it's optional.
Does my credit score affect my car insurance rate?
In most states, yes, drivers with poor credit pay nearly $1,000 a year more on average than those with excellent credit for comparable coverage. A handful of states, including California and Michigan, ban this practice entirely.
What is the minimum car insurance required by law?
It varies by state, most require around 25/50/25 in liability coverage, but a few require more (Alaska, Maine, Michigan, North Carolina, and Virginia require 50/100/50) and Florida uses a different PIP-based structure entirely. Worth confirming your specific state's requirement rather than assuming a national standard.
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