Here's a closer look at how your state compares, what's driving the differences, and what you can do if you live somewhere with expensive coverage.
October 28, 2026
The typical American household spends about 1.7% of its income on car insurance, according to the Insurance Information Institute's (Triple-I) Insurance Affordability Index, launched in September 2026. But the national figure doesn’t tell the whole story.
In Louisiana, car insurance accounts for 3.06% of the median household income. In Hawaii, it makes up 0.91%, which means a Louisiana household spends more than three times the share of its income on car insurance as a household in Hawaii does.
The index also tracks whether affordability is getting better or worse in each state. Most states are steady or improving, but eight are moving in the wrong direction, including Texas, Nevada and New Jersey.
Here's a closer look at how your state compares, what's driving the differences, and what you can do if you live somewhere with expensive car insurance coverage.
Nationally, car insurance costs about 1.7% of median household income. For a household earning $80,000 a year, that's roughly $1,360.
Coverage has become a larger share of household income, rising 9% since 2020. And homeowners insurance costs have climbed even more, increasing 24% to 2.4% of median household income.
Where you live can make a big difference in how affordable car insurance is. Triple-I’s Insurance Affordability Index divides each state's average annual auto premium by its median household income, then sorts states into five tiers, from "most affordable" to "least affordable."
A state can land in a lower tier because premiums are high, because incomes are low, or both.
The price of insurance only tells part of the story. Two drivers may pay roughly the same annual premium, but if household incomes are significantly different between their states, that premium represents a very different financial burden.
Affordability is really about how much of a household’s income has to be allocated to insurance.
“In a lower-income state, even a premium that looks average nationally can consume a meaningful portion of someone’s budget. That is why it’s important to look beyond the dollar amount of the premium and consider insurance costs relative to income and the overall cost of living,” Youshock explains.
The table below shows each state's 2025 figures from the Triple-I index, listed from most to least affordable. The "Trend" column shows Triple-I's assessment of whether affordability in that state is improving, steady or deteriorating.
State | Share of median household income | Average annual premium | Median household income | Affordability tier | Trend |
|---|---|---|---|---|---|
Hawaii | 0.91% | $950 | $103,869 | Most affordable | Improving |
New Hampshire | 0.92% | $1,115 | $121,243 | Most affordable | Improving |
North Dakota | 1.01% | $905 | $89,445 | Most affordable | Improving |
Maine | 1.08% | $1,000 | $92,898 | Most affordable | Improving |
Vermont | 1.08% | $1,015 | $93,985 | Most affordable | Improving |
Iowa | 1.09% | $980 | $89,862 | Most affordable | Steady |
Kansas | 1.14% | $1,090 | $95,809 | Most affordable | Improving |
Idaho | 1.17% | $990 | $84,330 | Most affordable | Improving |
Virginia | 1.18% | $1,245 | $105,422 | Most affordable | Deteriorating |
Wisconsin | 1.18% | $1,035 | $87,888 | Most affordable | Steady |
South Dakota | 1.19% | $1,060 | $89,444 | Affordable | Steady |
Nebraska | 1.21% | $1,135 | $93,835 | Affordable | Steady |
Ohio | 1.21% | $1,050 | $86,482 | Affordable | Improving |
Utah | 1.22% | $1,330 | $109,349 | Affordable | Steady |
Massachusetts | 1.25% | $1,525 | $122,105 | Affordable | Improving |
Montana | 1.26% | $1,100 | $87,169 | Affordable | Improving |
Wyoming | 1.26% | $1,040 | $82,568 | Affordable | Steady |
Indiana | 1.27% | $1,040 | $81,894 | Affordable | Steady |
Alaska | 1.28% | $1,250 | $97,371 | Affordable | Deteriorating |
Minnesota | 1.29% | $1,225 | $94,604 | Affordable | Deteriorating |
Washington | 1.35% | $1,375 | $101,676 | Moderate | Steady |
North Carolina | 1.36% | $960 | $70,436 | Moderate | Steady |
Oregon | 1.38% | $1,285 | $93,158 | Moderate | Steady |
California | 1.40% | $1,460 | $104,552 | Moderate | Improving |
Tennessee | 1.43% | $1,180 | $82,709 | Moderate | Improving |
Colorado | 1.44% | $1,620 | $112,145 | Moderate | Improving |
Illinois | 1.44% | $1,310 | $90,880 | Moderate | Deteriorating |
Maryland | 1.54% | $1,685 | $109,700 | Moderate | Deteriorating |
Arkansas | 1.55% | $1,100 | $70,954 | Moderate | Improving |
Pennsylvania | 1.55% | $1,320 | $85,300 | Moderate | Steady |
Missouri | 1.56% | $1,310 | $83,930 | Less affordable | Steady |
Connecticut | 1.58% | $1,610 | $101,964 | Less affordable | Improving |
Kentucky | 1.66% | $1,170 | $70,394 | Less affordable | Improving |
Arizona | 1.68% | $1,525 | $90,887 | Less affordable | Steady |
Oklahoma | 1.72% | $1,185 | $68,939 | Less affordable | Improving |
West Virginia | 1.72% | $1,175 | $68,431 | Less affordable | Improving |
Alabama | 1.75% | $1,180 | $67,616 | Less affordable | Improving |
New Mexico | 1.77% | $1,200 | $67,846 | Less affordable | Improving |
New Jersey | 1.82% | $1,920 | $105,489 | Less affordable | Deteriorating |
Rhode Island | 1.82% | $1,735 | $95,380 | Less affordable | Improving |
Delaware | 1.85% | $1,683 | $90,970 | Least affordable | Improving |
South Carolina | 1.92% | $1,580 | $82,378 | Least affordable | Improving |
Texas | 1.92% | $1,650 | $86,002 | Least affordable | Deteriorating |
Michigan | 1.97% | $1,675 | $85,097 | Least affordable | Improving |
Nevada | 2.03% | $1,785 | $87,732 | Least affordable | Deteriorating |
Georgia | 2.13% | $1,820 | $85,388 | Least affordable | Improving |
Mississippi | 2.18% | $1,320 | $60,471 | Least affordable | Improving |
New York | 2.27% | $2,100 | $92,561 | Least affordable | Steady |
Florida | 2.58% | $2,065 | $79,918 | Least affordable | Improving |
Louisiana | 3.06% | $1,900 | $62,014 | Least affordable | Steady |
Source: Triple-I Insurance Affordability Index (2026), based on Triple-I premium estimates, NAIC data and U.S. Census Bureau income data. Washington, D.C. is not included in the index's state data.
Triple-I classifies 10 states as least affordable for auto insurance: Delaware, Florida, Georgia, Louisiana, Michigan, Mississippi, Nevada, New York, South Carolina and Texas. Claims litigation was a key cost factor in all 10, and high uninsured-driver exposure contributed in half of them.
Louisiana has the least affordable car insurance in the country, a position it has held in Insurance Research Council (IRC) affordability rankings for years. Two factors drive it: a high average premium of $1,900 a year and a median household income of $62,014, the second lowest in the index. Triple-I rates Louisiana's trend as steady and credits recent legislative reforms targeting insurance fraud with helping improve average premiums in the state.
Florida drivers pay an average of $2,065 a year, the second-highest premium in the index. Florida is also one of the states where affordability is improving, which Triple-I attributes in part to the same type of fraud-focused legal reforms passed in Georgia and Louisiana. If you live in the state, our guide to the best car insurance in Florida compares the main options.
New York has the highest average premium of any state at $2,100 a year. Its median household income of $92,561 is higher than in most states, which keeps it from ranking even lower on the affordability scale. Triple-I rates New York's trend as steady. For provider options, see our list of the best car insurance in New York.
Mississippi shows how much income shapes affordability. Its average premium of $1,320 is in the middle of the pack, but its median household income of $60,471 is the lowest in the index. Mississippi also has the highest uninsured-driver rate in the nation, at about 29% of drivers. When uninsured drivers cause accidents, the cost often falls on insured drivers and their uninsured motorist coverage, which pushes premiums up.
The rest of the bottom 10 range from Georgia at 2.13% of income to Delaware at 1.85%. Georgia's average premium of $1,820 is among the highest in the country, though its trend is improving. Michigan, at 1.97%, is also rated as improving. Nevada (2.03%) and Texas (1.92%) are the only two states in the bottom 10 where affordability is deteriorating, a trend Triple-I attributes to rising costs in both states.
Triple-I rates eight states as deteriorating. Most of them aren't in the least affordable tier, which means drivers in states with average or below-average costs are still seeing car insurance take a bigger share of their income.
Maryland (1.54% of income): Maryland had the largest five-year increase in car insurance's share of income of any state, and its average premium is $1,685.
Texas (1.92%): Texas had the second-largest five-year increase and is now in the least affordable tier, with an average premium of $1,650. See our guide to the best car insurance in Texas if you're shopping there.
New Jersey (1.82%) and Illinois (1.44%): Both had five-year increases that rank among the largest in the index.
Nevada (2.03%): Nevada's increase is recent. Over the last two years, its share of income rose faster than almost any other state's.
Minnesota (1.29%), Alaska (1.28%) and Virginia (1.18%): All three are still rated affordable or most affordable, but the trend is moving the wrong way. Alaska, like Nevada, saw one of the sharpest two-year increases in the index.
A high premium doesn't always mean unaffordable insurance, and a moderate premium doesn't always mean affordable insurance. Since the index divides premiums by income, a state's position depends on both.
New Jersey drivers pay an average of $1,920 a year, the third-highest premium in the index, yet New Jersey sits in the "less affordable" tier rather than least affordable because its median household income is $105,489.
Massachusetts is an even clearer example. Its average premium of $1,525 is higher than in most states, but with a median income of $122,105, car insurance takes just 1.25% of household income there.
Two states can have similar average premiums and very different affordability because the premium is only one side of the ratio. Household income is the other, so the same premium takes a much bigger share of income where incomes are lower.
It works the other way, too. North Carolina's average premium of $960 is one of the lowest in the country, but its median income of $70,436 puts it in the middle tier. Mississippi's premium is moderate, yet the state is in the least affordable tier because its median household income is the lowest in the index.
That's why premium-to-income share is a more useful measure of how much car insurance strains a household budget than average premiums alone. It also explains why moving to a new state can change your car insurance bill in ways you might not expect.
Premiums follow claims costs.
State rules matter, too. Some states require drivers to buy more coverage than others. Rules about medical bills after a crash can also change the cost. But laws are only part of it. Insurers look at what claims cost where you live, including car repairs, injuries, and storm damage.
Triple-I points to three factors that show up repeatedly among the least affordable states:
Claims litigation: Legal costs were a key factor in all 10 of the least affordable states. When more claims end up in court, insurers pay more per claim and pass those costs on to policyholders.
Uninsured drivers: Half of the bottom 10 states have high uninsured-driver exposure, led by Mississippi at about 29%.
Repair costs: According to the index, most components of repair and rebuilding costs have outpaced overall inflation since 2020.
These pressures affect drivers with clean records, too. Our guide on why your car insurance can go up even with a clean driving record explains how rising claim costs feed into rates, and why car insurance is so expensive covers the broader cost drivers.
You can't change your state's legal climate, but you can control some of the factors that affect what you pay for car insurance coverage.
Focus on coverage before price. “Make sure the limits, deductibles and optional coverages still fit your life, since people sometimes carry protection they no longer need or too little of the protection that matters,” explains Lavine.
Shop around regularly. Prices for the same driver can vary widely between insurers, so compare quotes at least once a year and whenever your situation changes. Our step-by-step guide to switching car insurance companies walks you through the process.
Ask about every discount. Bundling, safe-driver and payment discounts add up. See our ways to lower your car insurance rate.
Consider usage-based insurance. If you drive safely or don't drive much because you’re retired or work remotely, for example, a program that prices your policy on your actual driving could lower your rate. Learn how usage-based car insurance can affect your rates.
Keep uninsured motorist coverage. In states with many uninsured drivers, dropping this coverage to save money can leave you paying for someone else's accident. Check your state's rules in our guide to car insurance minimum requirements by state.
Consider your car. “On an older car, it may be worth asking whether collision coverage still makes sense. If you have a car loan, check what your lender requires before changing it,” explains Espenschied.
This article analyzes state-level data from the Triple-I Insurance Affordability Index, launched on September 2, 2026. The index measures the average annual personal auto insurance premium in each state as a share of that state's median household income, using the affordability framework developed by the Insurance Research Council. Triple-I updates the average premium figures published by the National Association of Insurance Commissioners (NAIC), which lag by several years, to 2025 using estimates from its underwriting model. Income figures come from the U.S. Census Bureau. States are placed into five affordability tiers using quintile breakpoints. Trend ratings and comparisons of five-year and two-year changes come from Triple-I's state-level data, which BestMoney retrieved from the index in October 2026.
Triple-I is an industry-supported organization. Its measure relies on government income data and regulator-collected premium data, but the 2025 premium figures are modeled estimates rather than final NAIC data.
There's no official target, but the national figure is a useful benchmark. In 2025, the typical U.S. household spent about 1.7% of its income on car insurance, according to Triple-I. State figures range from 0.91% in Hawaii to 3.06% in Louisiana.
Louisiana, where car insurance takes 3.06% of median household income. Florida (2.58%) and New York (2.27%) follow.
Hawaii, at 0.91% of median household income, followed closely by New Hampshire (0.92%) and North Dakota (1.01%).
Not nationally. Car insurance's share of median household income is up 9% since 2020. Most states are now rated steady or improving, but eight, including Texas and Nevada, are deteriorating.
Louisiana combines a high average premium ($1,900 a year) with one of the lowest median household incomes in the country ($62,014). Claims litigation is also a major cost driver, though recent legislative reforms have helped improve average premiums.
Car insurance takes about 1.7% of the typical American household's income, but your state can put you well above or below that figure. Premiums aren't the only factor: household income also plays a major role in how affordable coverage is.
Households in Louisiana, Florida and New York pay the largest share, while drivers in Texas, Nevada and six other states are seeing costs grow faster than incomes. Wherever you live, comparing quotes, asking about discounts and keeping the coverage you need are the most reliable ways to keep car insurance from taking more of your budget than necessary.
Anna Baluch is an insurance and finance expert at BestMoney.com. With over a decade of writing experience, she specializes in insurance, banking, mortgages, personal loans, and retirement planning. Her work has been featured in publications like Forbes, Newsweek, Fox Business, Credit Karma, Insurify, and Realtor.com. Anna holds a bachelor’s in marketing from Northwood University and an MBA from Roosevelt University. Her goal is to empower consumers to make smart financial decisions.
