Home, auto insurance costs reach 18.4% of take-home pay – Insurance News

SAN FRANCISCO, Calif. — November 2025 — Americans pay anywhere from 2% to 18.4% of their take-home income for mandatory home and auto insurance, depending solely on where they live, according to a comprehensive new analysis by MoneyGeek covering all 50 states and Washington, D.C.

The study reveals Louisiana families pay $11,324 annually for home and auto coverage (18.4% of take-home pay) — more than the average American household spends on groceries and dining combined ($9,985 per year). Virginia families, by contrast, pay just $3,841 for identical coverage.

This $7,483 geographic penalty isn’t driven by driving records, home values or coverage quality. Geography alone determines these costs. “We found insurance burden varies by up to nine times between the highest and lowest-burden states,” said Mark Fitzpatrick, Insurance Analyst at MoneyGeek. “For median-income families in Louisiana, Mississippi and Florida, mandatory insurance now consumes more of their paycheck than food.”

Key Findings

• Insurance as percentage of income: Americans pay 2.05% to 18.4% of take-home income for home and auto insurance, with costs up to nine times higher in high-burden states than low-burden states
• Exceeds food costs: Louisiana and Florida families spend more on mandatory insurance than the average American household spends on groceries and dining ($9,985 annually)
• Climate correlation: The five states with the highest insurance burdens experienced major damage from 2024’s $182.7 billion in natural disasters, with hurricane and tornado exposure driving costs nine times higher than disaster-free states
• Geographic penalty: For identical home and auto coverage, living in Louisiana costs families $7,483 more annually than living in Virginia
• Wealth paradox: Mississippi has the nation’s lowest median homeowner income ($51,426) yet ranks fourth-highest for insurance burden (12.91%), while California ranks 38th (3.79%) despite higher living costs

Top and Bottom 5 States by Insurance Burden

Highest burden states:

1. Louisiana: 18.4% of take-home pay ($11,324 annually)
2. Florida: 16.65% ($13,152)
3. Oklahoma: 15.32% ($9,282)
4. Mississippi: 12.91% ($6,638)
5. Texas: 10.97% ($8,653)

 

Lowest burden states:

1. Hawaii: 2.05% of take-home pay ($1,584 annually)
2. New Hampshire: 2.32% ($2,136)
3. Vermont: 2.64% ($1,956)
4. Washington: 2.79% ($2,780)
5. Alaska: 2.95% ($2,601)

Why Costs Vary by State

 

MoneyGeek’s analysis identified three primary drivers:

 

• Climate risk: States with frequent hurricanes, tornadoes, and flooding generate billions of dollars in annual claims. NOAA reports 2024’s 28 billion-dollar disasters caused $182.7 billion in damages, with coastal states like Louisiana and Florida bearing the most insured losses.

 

• Litigation environment: States with plaintiff-friendly courts tend to have higher average claim settlements, with costs ultimately passed on to all policyholders through increased premiums.

 

• Regulatory approach: Insurance regulations vary widely, with some states capping rate increases while others allow market-based pricing. Competitive insurance markets with multiple carriers consistently show lower premiums.

Methodology

MoneyGeek calculated insurance burden as the percentage of take-home pay spent on combined homeowners and auto insurance premiums across all 51 jurisdictions.

 

• Income: Median homeowner household income from U.S. Census Bureau American Community Survey 2023 1-Year Estimates (Table B25119), with effective state and federal tax rates applied to determine take-home pay
• Insurance costs: MoneyGeek’s proprietary 2025 data combining average annual homeowners and auto insurance premiums by state
• Home insurance: Standardized coverage ($250,000 dwelling, $125,000 personal property, $200,000 liability, $1,000 deductible) for a 2000-built home
• Auto insurance: Full coverage (100/300/100 liability plus comprehensive and collision with $1,000 deductible) for one vehicle per household
• Burden calculation: Total annual insurance costs divided by calculated take-home pay

 

All income figures can be independently verified through the U.S. Census Bureau’s data portal.

Full Analysis and Interactive Data

👉 Complete state-by-state rankings, methodology and analysis: Home and Auto Insurance Costs Reach 18.4% of Take-Home Pay in Some States