Car Ownership Costs: How Geography Influences Insurance & Gas Prices

The cost of car ownership significantly varies by geographic location, with insurance and gasoline expenses differing widely among states.

A recent analysis by Mokaram Injury Lawyers explored this variation, using data from the National Association of Insurance Commissioners (NAIC) and the U.S. Energy Information Administration (EIA). This study ranked states based on combined costs from annual auto insurance and gasoline expenditure per capita, revealing significant differences among states in 2023 and 2024, though it excluded non-state Washington, D.C.

Geographical Impact on Insurance and Gasoline Costs

Transportation represents a notable share of household budgets, forming an estimated 17% of total expenses in 2024, according to the Bureau of Labor Statistics. This aligns with AAA’s 2025 report, which lists the total cost of a new vehicle at $11,577 yearly, considering depreciation and maintenance. These expenses, when examined alongside insurance and gasoline costs, which differ greatly by state, provide a comprehensive financial picture for car owners.

The NAIC identifies a broad spectrum of insurance premiums across the country, highlighting how state-specific factors like legislation and traffic conditions contribute to these variations. Similarly, the EIA tracks gasoline expenditure discrepancies, influenced by regional fuel prices and consumption patterns.

States with Highest Car Ownership Costs

The study identifies the ten states with the highest combined car ownership costs based on insurance and gasoline outlay:

• Louisiana: The highest total at $3,121; $1,754 for insurance and $1,367 for gasoline.
• Florida: Close second at $3,119 with insurance at $1,865 and gasoline at $1,254.
• Delaware: Third with $3,017; $1,462 for insurance, $1,555 for gasoline.
• Alabama: $2,914 total, driven by high gasoline needs at $1,833 alongside $1,081 insurance costs.
• South Carolina: Combined cost of $2,899; $1,532 for gasoline and $1,367 for insurance.
• Nevada: $2,898; $1,462 in insurance and $1,436 in gasoline.
• Georgia: Totaling $2,850 due to high insurance costs of $1,555 and $1,295 for gasoline.
• Arizona: $2,844 total; $1,344 for insurance and $1,500 for gasoline.
• Mississippi: $2,836; lower insurance at $1,200 but high gasoline costs at $1,636.
• Michigan: $2,791; insurance at $1,444 and gasoline at $1,347.

Implications for Insurance Professionals

These findings are crucial for insurance professionals who must consider geographic factors when assessing risk and pricing policies. Underwriters can utilize this data to adjust premiums more accurately, reflecting the varying cost structures across states. Insurance agents and brokers might leverage this information to educate consumers about potential savings based on relocation or driving behavior modifications.

Furthermore, insurers can drive strategic decision-making through a more nuanced understanding of the relationship between fuel expenditures and insurance costs, potentially influencing claims management and refining market strategies.

What to Watch Next

As the automotive landscape evolves, insurance professionals should monitor shifts in transportation technology and fuel efficiency, which could alter gasoline consumption trends and insurance risk assessments. Observing legislative changes at the state level that impact insurance or fuel costs will remain important, ensuring ongoing alignment with regulatory compliance and competitive positioning in the market.