Car insurance is highest in these 5 states – but drivers are about to get a win

There are five states where car insurance premiums will cost drivers a median of $2,676 a year or more, a new study has found.

Louisiana is home to the highest annual median rate in the nation at $3,342, according to an analysis published Monday by insurance marketplace The Zebra.

Residents of Louisiana will spend 5.1 percent of their yearly income on car insurance, more than twice the national average of 2.69 percent.

Nationally, the median annual car insurance rate was $2,079 – up from $1,933 in 2025, according to The Zebra.

While the national median rate ticked up in 2026, the analysis had some good news for consumers. Insurance rates are coming down, or rising only slightly, in many states because insurance companies are paying out less on claims than they bring in from premiums.

“This has now led to a hyper-competitive environment amongst insurance companies,” The Zebra CCO said in a statement. “They are spending a ton on marketing and dropping rates to stay competitive.”

Florida, the second most expensive state for car insurance, saw its median premium drop more than any other state in America: $353.50.

After Louisiana and Florida, Colorado ($2,905), Maryland ($2,800) and New Jersey ($2,676) had the highest median rates.

Meanwhile, Vermont ($1,398), Wyoming ($1,344) and North Carolina ($1,304) had the lowest median annual car insurance rates.

Car insurance rates have climbed drastically over the past five years. The average rate to insurance a car for a year was $1,483, according to a 2021 analysis from The Zebra. That number rose nearly $800 by 2026.

Several factors have contributed to the rise, according to a June panel discussion about car insurance at nonpartisan think tank Brookings Center on Regulation and Markets.

Experts said part of the blame falls on the complexity of modern cars. Vehicles are more “technologically sophisticated” nowadays, which means replacing items damaged in car accident is more expensive.

Inflation has played a role in higher replacement costs over the past five years, too – parts are nearly 30 percent higher.

“Inflation has exacerbated these impacts, with auto replacement costs up 28 percent from 2021 to 2025,” noted the Insurance Information Institute, whose CCO was on the Brookings panel.

Other causes of higher raters included “rampant” lawsuits against insurance companies, the institute said, and insurers raising rates to catch up to lost revenue when states froze rates during the pandemic.