Car Insurance Rates by State: Top 3 Most Expensive States in 2025

In 2025, car insurance rates by state vary widely across the country. Louisiana, Florida, and Nevada are often cited as the top three most expensive states for car insurance premiums. By contrast, Illinois drivers enjoy rates that are lower than the national average, making our state more affordable for coverage. 

However, even in Illinois (especially in Chicago), factors like dense traffic and vehicle theft can push premiums higher. For local drivers seeking better rates, call Insure on the Spot in Chicago at 773-202-5060 for a personalized quote and guidance on saving money on your car insurance.

1. Why Do Car Insurance Rates Vary by State?

Car insurance premiums aren’t one-size-fits-all—each state has unique conditions that influence rates. Insurers look at a variety of factors in different regions when setting prices. Here are some key reasons why costs differ from state to state:

• Traffic density and accidents: States (or cities) with heavy traffic and congestion tend to have more accidents, which leads to more claims. For example, urban areas like Chicago see higher claim frequencies than rural parts of Illinois.
  
• State insurance laws: Local laws and regulations play a big role. Some states (like Florida or Michigan) have no-fault insurance rules requiring personal injury protection, which drives up premiums. Illinois, however, is an at-fault state with more moderate liability requirements (25/50/20 for minimum coverage), helping contain costs.
  
• Crime and theft rates: Areas with higher vehicle theft or vandalism rates cause insurers to charge more for comprehensive coverage. A higher car theft rate in a big city can raise premiums compared to a safer small town in the same state.
  
• Weather and disasters: Natural disasters increase risk. Coastal states prone to hurricanes (like Florida) or regions with hailstorms and flooding often have higher claims, affecting insurance rates.
  
• Uninsured drivers: If a state has many uninsured or underinsured drivers, insured drivers end up paying more (through uninsured motorist coverage claims and higher premiums) to cover that risk.
  

2. How Does Illinois Compare to Other States in 2025?

Illinois is fortunate to have relatively affordable car insurance rates compared to many states. The average full coverage premium in Illinois is around $1,500–$1,600 per year, which is below the national average (around $1,900). This places Illinois among the more affordable states for car insurance. One reason is that Illinois’s insurance market is competitive, a nd our state’s risk factors (accident rates, weather events, etc.) are moderate compared to high-cost states.

Illinois also benefits from its insurance system and laws. As an at-fault state with reasonable minimum coverage requirements (25/50/20 for liability), Illinois avoids some of the cost inflators seen in states with stricter mandates. We don’t require expensive personal injury protection coverage that no-fault states do, and we have a relatively low incidence of fraud. All of this helps keep Illinois premiums in check. However, it’s important to note that even within Illinois, your location matters—drivers in big cities like Chicago typically pay more than those in smaller towns.

To put things in perspective, here’s a quick comparison of average annual full coverage premiums:

Louisiana and Florida top the list nationally, while Illinois falls well below those extremes.

3. What Are the Top 3 Most Expensive States for Car Insurance?

Some states face a perfect storm of risk factors that make their auto insurance costs the highest in the nation. Based on recent data, the top three most expensive states for car insurance in 2025 are:

• Louisiana: This state has the highest average premium, roughly in the $2,800–$3,900 per year range for full coverage. Louisiana’s rates are sky-high due to factors like frequent severe weather (hurricanes and flooding), a high rate of accident claims, and a litigious environment that drives up insurance costs.
  
• Florida: Florida is a close second, with average premiums around $2,500–$3,800 per year. Florida’s no-fault insurance system (requiring personal injury protection), along with a large number of uninsured drivers and fraud issues (like staged accidents), contribute to its very high insurance rates. Additionally, dense urban traffic in cities and hurricane risks add to the cost.
  
• Nevada: Often ranking third, Nevada’s average premiums hover around $2,700–$3,600 annually. A big reason is the traffic and congestion in areas like Las Vegas – more cars on the road means more accidents and claims. Nevada also has higher repair costs and a growing population, which together push premiums above the national norm.
  

California, Michigan, and Colorado are also notable for expensive car insurance. They sometimes appear in top-five lists, reflecting issues like high cost-of-living (raising repair costs), insurance fraud problems, or (in Michigan’s case) previous no-fault laws that made insurance pricey. No matter the exact ranking, these states all significantly exceed what we pay here in Illinois.

4. How Does Living in Chicago Affect Your Car Insurance Rate?

Living in Chicago means you might pay more for car insurance than someone in rural Illinois. Big cities naturally come with higher risks: Chicago’s heavy traffic congestion leads to more accidents and claims. The more vehicles and commuters on the road, the greater the chance of collisions – and insurers factor that into higher premiums for city drivers.

Chicago also has to contend with issues like vehicle theft and vandalism. Higher crime rates in a large city can translate to more comprehensive coverage claims (for stolen or damaged cars), which drives up costs for everyone. Additionally, urban areas often see higher medical and lawsuit costs after accidents, and repair shops in Chicago might charge more than those in small towns. All these urban factors mean that, on average, Chicago drivers pay more (around $1,800 a year for full coverage) compared to the Illinois state average. If you’re a Chicago resident, it’s even more important to shop around and take advantage of discounts to counter these higher city rates.

5. How Can Chicago Drivers Save on Car Insurance?

Even though Illinois is relatively affordable, Chicago drivers can still take steps to lower their car insurance premiums. Here are some smart strategies to save money on your auto insurance in the city:

• Shop Around and Compare Rates: Prices can vary widely between insurance companies. Get quotes from multiple insurers or use a local agency (like Insure on the Spot) to compare options and find the best deal.
  
• Maintain a Clean Driving Record: Safe driving pays. Avoid accidents and tickets – a good driving history will qualify you for lower rates over time. Many insurers offer safe-driver discounts after a few claim-free years.
  
• Take Advantage of Discounts: Ask about all available discounts. You might save by bundling auto with home insurance, installing anti-theft devices on your car, or even by completing a defensive driving course. Chicago drivers who park in a secure garage or drive fewer miles can also see lower rates.
  
• Choose Coverage Wisely: Make sure your coverage matches your needs. If you have an older car, you might skip comprehensive/collision or raise your deductibles to reduce premiums. Just ensure you still meet Illinois’s legal requirements (at least 25/50/20 liability coverage) and have enough protection for peace of mind.
  
• Improve Your Credit (if applicable): In Illinois, insurers can use credit history as a factor. Maintaining good credit can indirectly help you secure a better insurance rate. This might not be as immediate as other steps, but it’s part of the bigger picture for savings.

Frequently Asked Questions (FAQs)

Q: What’s the minimum auto insurance required in Illinois?

A: In Illinois, the minimum liability auto insurance is $25,000 for bodily injury per person, $50,000 per accident for bodily injury, and $20,000 for property damage. This basic required coverage is often referred to as “25/50/20” minimum coverage. You must carry at least these limits to register and drive a vehicle in Illinois legally.

Q: Are car insurance rates higher in Chicago than in other parts of Illinois?

A: Yes. Chicago’s busy traffic and higher incidence of accidents and theft mean insurance premiums in the city are typically higher than the Illinois state average. Urban drivers face more risk factors (like congestion and crime), so insurers charge more to offset those risks.

Q: Is Illinois a no-fault insurance state?

A: No. Illinois is an at-fault (tort) state for auto insurance. This means if you cause an accident, you (and your insurance) are responsible for the damages. In contrast, no-fault states like Michigan or Florida require each driver’s insurance to cover their injuries regardless of fault (often through personal injury protection coverage), which can increase overall insurance costs.

Q: How can I lower my car insurance premium in Chicago?

A: There are several ways to save. Start by maintaining a clean driving record and good credit, since both can earn you better rates. Make sure to ask about discounts (for example, safe driver, multi-policy, or vehicle safety features) and compare quotes from different insurers.

Get a Quote Today!

As a local Chicago auto insurance provider, Insure on the Spot understands Illinois drivers and how to secure the most competitive rates. Our team is here to help you navigate state-wide rate differences and find savings right here in Chicago. Call 773-202-5060 or get a Free Quote Online Today to see how much you can save on quality car insurance coverage.