Buying car insurance in the United States can seem confusing at first.
Terms like liability, deductible, claim and full coverage are part of everyday vocabulary, but are not so obvious to those who have never delved into the subject.
In 2025, with the premiums at high levels after years of increases, many people ask themselves: how to protect the car without spending more than necessary?
In this complete guide, you will understand:
- How it works auto insurance in the USA.
- What are the main coverages.
- How much does it cost, on average, in 2025.
- What most influences the price.
- The best value for money insurance companies.
- As the claims (claims) affect the premium.
- Strategies to save money without sacrificing protection.
How car insurance works
Insurance is regulated at the national level. state, not federal. Each state sets minimum coverage limits and specific rules.
You set up your policy by choosing the coverages:
- Liability Coverage (Bodily Injury and Property Damage): Compensates third parties if you are responsible for an accident. It is mandatory in most states.
- Collision: covers damage to your car in collisions, regardless of fault.
- Comprehensive: covers risks such as theft, vandalism, fire, hail, floods, and falling branches.
- Uninsured/Underinsured Motorist (UM/UIM): protects against uninsured or underinsured motorists.
- PIP (Personal Injury Protection) or MedPay: covers medical expenses. PIP, common in states no-fault, can also cover lost wages.
Each coverage has limit and may have deductible, that is, the amount you pay before the insurer takes over the rest.
How much will car insurance cost in 2025?
Values remain high in 2025, but the pace of increase has slowed compared to 2023 and 2024.
- THE national full coverage average is between US$ 2,300 and US$ 2,700 per year (US$ 190 to 225/month).
- Already the minimum coverage required by state comes out, on average, between US$ 600 and US$ 900 per year.
- In expensive states like Nevada, Florida and Michigan, the average cost goes from US$ 3,200/year.
- In the cheaper states, like Maine, Vermont and New Hampshire, the prizes are close to US$ 1,200 to 1,300/year.
In other words: depending on where you live, you could pay three times or less than the national average.
What influences the value of premium
Price varies depending on personal and local factors:
- State and Zip Code: Areas with more theft, fraud, accidents, or natural disasters have higher premiums.
- Vehicle: EVs (electric cars) and luxury SUVs tend to have higher insurance costs due to repair costs. Used sedans and economy vehicles tend to be cheaper.
- Driving history: claims previous infractions such as speeding tickets and accidents at-fault push the price up.
- Serious offenses (DUI, hit-and-run): can almost double the prize. On average, a DUI increases insurance premiums by ~80%.
- Car use: annual mileage and usage profile (work, leisure, delivery).
- Telematics programs (Usage-based insurance): Those who drive little or safely can get good discounts.
- Credit score: still used in many states as a risk indicator.
- Deductible chosen: higher deductibles reduce the monthly premium but increase the risk in case of claim.
How do they work? claims
THE claim is the claim for compensation. They remain registered and influence the price for years.
- At-fault accident: accident in which you are at fault.
- Not-at-fault accident: accident in which another driver is at fault.
- Total loss: when the car is considered a total loss.
Typical impacts:
- One at-fault claim can increase the premium up to 40% or more.
- One DUI can take full coverage from ~US$ 2,700 to more than US$ 5,100/year.
- One hit-and-run can overcome US$ 3,700/year.
Best Insurance Companies in 2025
The ranking varies by state, but some names stand out:
- Geico: among the cheapest for drivers with a good track record.
- Nationwide: excellent value for money and leader in programs Usage-based insurance.
- Travelers: good options for families and experienced drivers.
- State Farm: strong network of local agents and discounts with bundle.
- Progressive: flexible and known for discounts for specific profiles.
- USAA: almost always cheaper, but exclusive to military personnel and their families.
- Amica, Erie and NJM: smaller in scale, but leaders in satisfaction in regions such as New England, Mid-Atlantic and Southeast (according to JD Power 2025).
Practical examples of variations in car insurance
- Good driver in Ohio: ~US$ 1,800/year.
- Same driver in Nevada: ~US$ 3,400/year.
- After an at-fault accident: average premium could rise to ~US$ 2,900/year.
- After a DUI: premium can exceed US$ 5,000/year.
How to save in 2025
- Compare quotes from 5–8 insurance companies before closing.
- Review your policy annually, as your profile and discounts may change.
- Take advantage of telematics programs if you drive little or safely.
- Bundle: to combine auto insurance with home or Renters Insurance.
- Good driver / good student discounts help families save.
- Choose an appropriate deductible: higher reduces the premium but increases your risk.
- Don't settle for the state minimum: opt for limits of at least 100/300/100 (100k per person, 300k per accident, 100k damage).
Is it worth hiring just the minimum?
Run only with the state minimum (state minimum liability) may be legal, but not necessarily safe. Medical and material costs are very high and can quickly exceed minimum limits.
Experts recommend hiring full coverage or at least significantly increase the limits of liability.
Trends in 2025
- More stable prizes: average increases of 7% in 2025, much less than in previous years.
- Greater use of telematics and pay-per-mile.
- EVs still drive premiums up, but a gradual reduction is expected as repairs become more common.
- More competition in expensive states: Insurance companies are once again competing for customers in places like California, Florida and Texas.
Conclusion
In 2025, buying car insurance in the US requires research and planning.
The national average price is between US$ 2,300 and US$ 2,700/year, but the variation by state is huge.
While drivers in Maine pay just over $1,200/year, in Nevada the amount can reach $3,400/year or more.
The key to best value for money is compare quotes, use available discounts and understand your coverage well.
If you have a good driving record, participate in telematics programs, and review your policy annually, you can save money without sacrificing protection.
The national average for full coverage is between US$$ 2,300 and US$$ 2,700 per year. The minimum coverage required by states ranges from US$$ 600 to US$$ 900 per year, but can be cheaper or more expensive depending on the region.
The main ones are: Liability (Bodily Injury and Property Damage), Collision, Comprehensive, Uninsured/Underinsured Motorist, and PIP/MedPay. Each covers specific situations.
Yes. All states require at least minimum liability coverage, with the exception of New Hampshire and Virginia, which allow legal alternatives (such as security deposits).
It's a combination of liability, collision, and comprehensive insurance. While not required by law, it's the most comprehensive and recommended option for those seeking full protection.
Any claim can increase the premium. At-fault accidents increase the premium by an average of 40%. A DUI (driving under the influence) can increase the premium by up to 80% or more.
Yes. In 2025, EVs will still have higher premiums due to the cost of repairing batteries and parts, although this will trend downward in the coming years.
Among the most cited are Geico, Nationwide, Travelers, State Farm, Progressive, and USAA (the latter exclusively for military personnel and their families). In some regions, Amica, Erie, and NJM stand out in terms of satisfaction.
This is the deductible: the amount you pay out of pocket in the event of a claim. Higher deductibles reduce your monthly premium but increase your out-of-pocket expenses in the event of an accident.
