If you search for the average cost of car insurance, you will find a dozen different answers, and almost none of them tell you where the number came from. That is a problem, because a figure with no source, no date and no definition is not useful for budgeting. I wrote this guide at Ecommerce Paradise to show you the averages that regulators and research groups actually publish, what each one measures, and how to turn them into a realistic number for your own situation.
I have been selling online since 2010, and I budget car costs the same way I budget any recurring business expense: start with a trustworthy benchmark, then adjust for my own facts. For ecommerce owners and the self-employed, those facts include things a national average never captures, like using a vehicle for business or moving between states.
This article is the cost benchmark companion to my main guide on how to lower car insurance. Read this one to understand the number, and read that one to change it.
Disclosure: I am not an insurance agent, broker or financial advisor, and this article is education, not personalized financial advice. Ecommerce Paradise may earn a commission if you request offers through the partner tools on this page, at no extra cost to you. Rates and coverage rules vary by state and by insurer, so confirm everything with a licensed agent or the insurer before you buy. Information in this article is current as of October 2026.
The Published Averages at a Glance
Here are the three national figures I would trust most, each from a named publisher with a stated year. They are different numbers because they measure different things, which I explain below the table.
| Measure | Figure | Publisher and data year | What it covers |
|---|---|---|---|
| Combined average premium per insured vehicle | $1,438 | NAIC Auto Insurance Database Report, released Feb. 13, 2026, 2023 data | Liability plus collision plus comprehensive averages added together |
| Average auto insurance expenditure | $1,282 | NAIC, as published by Triple-I, 2023 data | What consumers actually spent; assumes liability on every vehicle but not necessarily collision or comprehensive |
| Full-coverage cost, modeled driver | $2,098 per year | AAA Your Driving Costs 2026 | Full coverage policy for a driver under 65 with more than 6 years of experience, no accidents, in a suburb or city |
Notice the range. The lowest figure reflects a mix of drivers who buy only liability and drivers who buy more, while the highest models a clean-record driver buying full coverage. None of them is “the” average. All three are useful, and your own quote will probably land somewhere nearby or well outside, depending on the factors I cover later.
Get a real car insurance quote for your own situation
Why There Are Three Different Averages
The National Association of Insurance Commissioners, or NAIC, is the group of state insurance regulators. It publishes more than one average, and the gap between them confuses people. Triple-I (the Insurance Information Institute) explains on its auto insurance facts and statistics page that the average expenditure “measures what consumers actually spend for insurance” and that NAIC assumes all insured vehicles carry liability coverage but not necessarily collision or comprehensive. It also notes that this figure does not equal the sum of the liability, collision and comprehensive averages.
The NAIC database report works differently. In its 2022/2023 Auto Insurance Database Report release, dated February 13, 2026, NAIC reports a national combined average premium of $1,438 per issued vehicle, a 14.42 percent increase from 2022 to 2023. Per NAIC’s definition, the combined figure is the sum of the average liability, collision and comprehensive premiums, which is closer to the cost of a policy with all three.
The AAA number comes from a third approach entirely. AAA models a specific kind of driver and a full coverage policy. Its fact sheet puts insurance at $2,098 per year, assuming a driver under 65 with more than six years of experience, no accidents, and a suburban or city address. That is a useful benchmark for a clean-record driver, but it is a model, not a survey of what everyone pays.
What the Averages Look Like per Month
Annual figures are hard to feel. Dividing by twelve is simple arithmetic, not a published statistic, but it gives you a rough monthly picture. The NAIC combined figure of $1,438 works out to about $120 per month per insured vehicle. The $1,282 average expenditure is about $107 per month, and AAA’s $2,098 is about $175 per month.
Be careful with any site that quotes a monthly figure without naming its source or year, because the same data can be sliced in many ways.
How Fast Prices Moved
The more important number in the NAIC release is the change. The combined average rose 14.42 percent from 2022 to 2023, and the Triple-I page reports the average expenditure rose 14.0 percent to $1,282 from $1,127. Those are large one-year jumps, which is why a price you locked in a few years ago may no longer reflect the market. For the individual coverage averages, see the table in the next section.
Averages by Coverage Type
The NAIC database report breaks the national average into its pieces. Liability pays for damage and injuries you cause to others, and collision pays to repair your own car after a crash. Here are the national per-vehicle averages for the two most recent years in the report.
| Coverage | 2022 average | 2023 average |
|---|---|---|
| Liability | $660.60 | $736.65 |
| Collision | $400.59 | $463.71 |
Source: NAIC Auto Insurance Database Report, 2022/2023 edition. Comprehensive, which covers theft and non-collision damage such as fire, hail and flood, is the third piece of the $1,438 combined figure.
Why does this breakdown matter to you? Because it shows where a policy’s cost comes from. If you drive an older car and carry only liability, your premium will look more like the liability row than the combined number. If you finance a vehicle, the lender will likely require collision and comprehensive, according to Triple-I’s auto insurance basics, and the combined figure becomes the more realistic benchmark.
Average Car Insurance Cost by State
State averages vary far more than most people expect. Triple-I republishes the NAIC state ranking on the same facts page, and the gap between the top and bottom of the list is large.
| Most expensive (table labeled 2023) | Amount | Least expensive (table labeled 2023) | Amount |
|---|---|---|---|
| 1. Louisiana | $1,494.70 | 1. North Dakota | $691.77 |
| 2. New York | $1,436.45 | 2. Maine | $703.81 |
| 3. Michigan | $1,418.50 | 3. Iowa | $707.90 |
| 4. District of Columbia | $1,415.18 | 4. Idaho | $724.41 |
| 5. Rhode Island | $1,390.93 | 5. South Dakota | $738.59 |
| 6. Florida | $1,371.99 | 6. Wisconsin | $752.98 |
The list continues to ten on each side, and the page is worth reading in full. The key point is the spread: the most expensive state on the list is more than double the least expensive one.
One caution before you quote any single state. The summary text on that same Triple-I page says Florida had the highest 2023 average expenditure at $1,865, followed by Louisiana ($1,754) and New York ($1,753). Those numbers do not match the ranking table above, and I could not reconcile the two from the page. Treat the table as a picture of the spread, and check the page for the current ranking.
Why do states differ so much? Triple-I reports that NAIC finds urban population, miles driven relative to highway miles, and disposable income per capita are correlated with state premiums, and that high-premium states tend to be more urban, with higher wage and price levels and greater traffic density. That is a statement about correlation, not a guarantee that any one factor explains your state.
Florida, Texas and California Side by Side
Florida, Texas and California come up often for ecommerce owners and nomads who are choosing a home base or relocating. The NAIC database report publishes liability and collision averages for each, so here they are for 2023, next to the national figure.
| Area | Liability (2023) | Collision (2023) |
|---|---|---|
| National | $736.65 | $463.71 |
| Florida | $1,294.57 | $468.92 |
| Texas | $797.86 | $529.05 |
| California | $660.84 | $607.06 |
Source: NAIC Auto Insurance Database Report, 2022/2023 edition, per-vehicle averages. The pattern is interesting. Florida’s liability average is far above the national figure, while California’s is below it but its collision average is higher. The liability and collision pieces move independently, which is one reason state rankings depend on the metric you use.
I go deeper on Florida in my guide to the cheapest car insurance in Florida. The Texas guide does the same for that state, and what drives a state’s price is a theme in both.
Why Your Quote Will Not Match the Average
An average blends millions of drivers. Your price is built from your own facts. The Texas Department of Insurance lists the main ones in its consumer auto insurance guide: driving record and claims history, where you live, the type of car, how you use the car, and, with some companies, your credit score. The Florida Division of Consumer Services toolkit adds vehicle type and value, annual mileage, territory, age and gender, especially under 25, and credit history.
Two of those factors deserve a closer look if you work for yourself. The first is location. TDI says rates are higher in a city and that ZIP codes within a city can differ, so a move across town can change your price.
The second is how you use the car. TDI says your rates will be higher if you drive to and from work or use the car for business, which is why a delivery-heavy ecommerce owner may price above a remote worker who barely leaves the house.
Coverage Level Changes the Math
The cheapest policy is not the best policy. State minimums are the legal floor, and TDI’s HelpInsure site advises that you might consider buying more liability coverage than the law requires, because a minimum policy may not cover a multi-vehicle accident or a totaled car. Higher limits and lower deductibles raise your premium, and the reverse lowers it. When you compare your quote to an average, make sure you are comparing the same kind of policy.
The Business Use Wrinkle
This is the part of the cost conversation that most average-cost articles skip, so let me be direct. If your vehicle does business work, the average for a personal commuter is not your benchmark, and a personal policy may not cover that use at all.
TDI addresses it in its guidance on delivering packages and what to know about auto insurance. It says some personal use policies may cover you during a paid delivery, while others will not cover driving for business, and it advises telling your insurer if you are driving for business, because otherwise claims could be denied. It adds that a delivery add-on typically costs less than a commercial policy because insurers consider business driving riskier than personal driving.
So when I budget, I do not use the national average as my number. I get a written answer from the insurer about my actual use, and I budget from a real quote that reflects it. If you are not sure how to describe your use, my guide on how to lower car insurance walks through the questions to ask.
How to Find Your Own Number
The only price that matters is the one an insurer will actually charge you. Here is how I would find it, in order.
Start with your state’s free tools if it has them. Texas runs HelpInsure (helpinsure.com), which lets you compare policies and rates in your area, though it says the results are informational and not a substitute for a final quote. Florida’s Office of Insurance Regulation runs the CHOICES auto rate comparison tool, which shows sample rates from approved filings and states clearly that your own premium will vary. California’s Department of Insurance, in its auto insurance guide, tells consumers to get several quotes and ask for each in writing.
Then request quotes from several insurers with identical coverage and driver details. NAIC stresses that the information you give each company should be the same. If you want a fast way to see offers from multiple providers, the tool below can start the process, and you can still check each result against your state’s tools.
See auto insurance rates from multiple providers
Budgeting Car Insurance as a Business Owner
If you use a vehicle in your business, the insurance cost belongs in your numbers, but how you deduct it matters. The IRS explains in Topic 510 on business use of a car that you can generally use either the standard mileage rate or actual expenses, and that insurance is among the costs you include under actual expenses, limited to the business share. Which method works out better depends on your numbers, so talk to a CPA.
A practical setup is to run vehicle costs through a business account such as Mercury, which keeps those costs apart from personal spending. Then keep clean monthly books in a tool like Finaloop, so your insurance premium, mileage log and receipts all land in one place at tax time. Separating business and personal driving also makes it easier to answer the insurer when it asks how you use the vehicle.
If you are still building the business that justifies the vehicle, start with my high-ticket dropshipping guide. The business formation guide covers the entity side of keeping personal and company costs apart.
If you form an LLC, I recommend Northwest Registered Agent because it uses its own address on your public filings.
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Common Mistakes When Using Average Prices
The biggest mistake is treating an average as a quote. It is a benchmark. Close behind is comparing different metrics, such as an NAIC combined average against an average expenditure, because they are built differently.
Old data is the next trap, especially when prices moved by double digits in a single year. Coverage differences matter too. A quote that looks high may simply include higher limits or lower deductibles than the average assumes.
Do not forget use and location. If your vehicle does business work, or you are comparing two states, the national figure is a starting point at best. And get every quote in writing, with the coverage, limits, deductibles and use spelled out.
A Simple Plan to Get Your Real Number This Week
On day one, gather your current declarations page and list your coverages, limits and deductibles. On day two, write down how you use the vehicle, including any business driving, and your annual mileage. On day three, run your state’s comparison tool if one exists. On days four and five, request at least three quotes with identical details and ask each insurer about business use.
When you have the quotes, compare them to the benchmarks in this article. If one is far above the averages, look for the reason: location, record, vehicle, business use or coverage level. If one is far below, check that nothing important was left out. For ideas on bringing the number down, the car insurance savings guide covers the cost side directly.
On the income side, start with my high-ticket niches list. My guide to finding suppliers is where I would go next if you want the budget to feel easier.
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Frequently Asked Questions
What is the average cost of car insurance?
It depends on the measure. For 2023, NAIC reported a national combined average premium of $1,438 per insured vehicle in its database report released in February 2026, while Triple-I, citing NAIC, reported an average expenditure of $1,282. AAA models $2,098 per year for a clean-record driver with full coverage.
Is the average cost per month about $120?
Dividing the NAIC combined average of $1,438 by twelve gives roughly $120, but that is my arithmetic and not a published monthly statistic. Your own monthly cost depends on your state, vehicle, record, coverage and use.
Which states have the highest and lowest average premiums?
Triple-I’s ranking table, citing NAIC, lists Louisiana, New York, Michigan, the District of Columbia and Rhode Island as the most expensive on average expenditure, and North Dakota, Maine, Iowa, Idaho and South Dakota as the least expensive. The summary text on the same page puts Florida first for 2023, so check the page for the current ranking.
Why do different websites show different averages?
They use different data, years, coverage assumptions and driver profiles. Check the publisher, the year and the definition before you rely on a number.
Does using my car for business change the price?
It can. TDI says rates are higher when you use a car for business, and some personal policies do not cover business driving at all. Tell your insurer and get the answer in writing.
I hope this gives you a benchmark you can trust. Use it to sanity-check your quotes, and if you are building the business behind the budget, the free high-ticket dropshipping guide is a good place to begin.
More Guides in This Series
This guide is one piece of my car insurance series, so here are the other guides that fill in the rest of the picture.
- Full coverage car insurance: what the term really includes and when it is worth paying for.
- Cheapest car insurance: how to find a low price without gutting your coverage.
- Car insurance quotes: how to compare quotes properly so the numbers actually match.
- Best car insurance companies: the criteria I would use to judge an insurer before you buy.
- Insurance increase after a speeding ticket: how a ticket can affect your premium and what to do about it.
- Cheapest car insurance in Florida: the state rules and shopping tips for Florida drivers.
- Cheapest car insurance in Texas: the state rules and shopping tips for Texas drivers.
- Cheapest car insurance in California: the state rules and shopping tips for California drivers.
Related Articles
If you found this useful, these guides go deeper on related topics:
- How to Lower Car Insurance 2026
- What Is High-Ticket Dropshipping?
- Business Formation for High-Ticket Dropshipping
- Self-Employed Mortgage Guide 2026
- Legal Essentials for High-Ticket Dropshipping
Trevor Fenner is an ecommerce entrepreneur and the founder of Ecommerce Paradise, a platform focused on helping entrepreneurs build and scale profitable high-ticket ecommerce and dropshipping businesses. With over a decade of hands-on experience, Trevor specializes in high-ticket dropshipping strategy, niche and product selection, supplier recruiting and onboarding, Google & Bing Shopping ads, ecommerce SEO, and systems-driven automation and scaling. Through Ecommerce Paradise, he provides free education via in-depth guides like How to Start High-Ticket Dropshipping, advanced training through the High-Ticket Dropshipping Masterclass, and fully done-for-you turnkey ecommerce services for entrepreneurs who want a faster, more hands-off path to growth. Trevor is known for emphasizing sustainable, real-world ecommerce models over hype-driven tactics, helping store owners build scalable, sellable, and location-independent brands.
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