Drivers who buy bare-minimum car insurance paid about 14% more in 2025, while drivers with full coverage and clean records watched their rates fall roughly 6%, according to Insurify. The relief that dominated 2026 headlines skipped the people least able to absorb a hike: minimum-coverage buyers, teens, and drivers with thin credit.
Minimum-coverage car insurance rose about 14% over 2025, climbing from $635 to $722 a year, even as full coverage dropped roughly 6% to $2,144, according to Insurify. Six states (California, Virginia, North Carolina, Utah, New Jersey, and Hawaii) raised the minimum liability limits drivers are legally required to buy, and a record 15.4% of motorists now drive uninsured, both forces pushing the price of a bare-bones policy higher into 2026.
- Minimum-coverage premiums climbed 14% in 2025, from $635 to $722, while full coverage fell 6% to $2,144 (Insurify)
- Six states raised mandatory minimum liability limits in 2025 and 2026, lifting the cost of the cheapest legal policy
- A record 15.4% of U.S. drivers carried no insurance in 2023, loading uninsured-motorist costs onto everyone else (IRC)
- A 16-year-old now averages $10,387 a year for full coverage, and a DUI conviction adds 35% to a premium
The Two-Track Car Insurance Market
The car insurance market split into two tracks in 2025. Insurify's 2026 report shows full-coverage prices fell 6% nationally to $2,144 a year, the first real break drivers had felt since premiums surged 46% between 2022 and 2024. Minimum-coverage buyers moved the opposite way, paying 14% more as their average annual premium rose from $635 to $722.
As of June 2026, the national average sits at $186 a month for full coverage and $98 for liability-only, both flat since spring, Insurify reported on June 16. Those averages held steady through May, yet they mask a widening split between what good-credit drivers pay and what budget shoppers do. Maryland remains the most expensive state at $303 a month and New Hampshire the cheapest at $82 by Insurify's count, though Insure.com's methodology ranks Louisiana and Florida highest.
Why Minimum Coverage Got More Expensive
Two forces converged on the cheapest policies, and neither one touched the discount good drivers earned on full coverage. The first is regulatory. The second is the climbing cost of paying bodily-injury claims.
States Raised the Minimum You Must Buy
Six states have lifted the minimum liability limits drivers are legally required to carry since the start of 2025, and a higher mandated floor produces a higher floor price. California raised its limits on January 1, 2025 for the first time since 1967, moving from 15/30/5 to 30/60/15 under SB 1107. New Jersey and Hawaii joined the list on January 1, 2026.
| State | Old Limits | New Limits | Effective |
|---|---|---|---|
| California | 15/30/5 | 30/60/15 | Jan 1, 2025 |
| Utah | 25/65/15 | 30/65/25 | Jan 1, 2025 |
| Virginia | 30/60/20 | 50/100/25 | 2025 |
| North Carolina | 30/60/25 | 50/100/50 | Jul 1, 2025 |
| New Jersey | 25/50/25 | 35/70/25 | Jan 1, 2026 |
| Hawaii | 20/40/10 | 40/80/20 | Jan 1, 2026 |
Limits shown as bodily injury per person / per accident / property damage, in thousands of dollars. Sources: Bankrate and Insurance.com state-minimum tracking, 2025 and 2026.
Drivers in those states who carried the old bare-minimum policy must now buy more coverage just to stay legal, which raises the premium before any risk factor enters the calculation. North Carolina's move to 50/100/50 on July 1, 2025 doubled its property-damage floor to $50,000. New Jersey lifted its bodily-injury minimum 40%, from $25,000 to $35,000 per person, on January 1, 2026.
Uninsured Drivers and Lawsuit Costs Hit Liability Hardest
A minimum policy is a pure liability product, so it absorbs the full force of two cost trends that barely reach collision or comprehensive coverage. A record 15.4% of U.S. drivers, more than one in seven, carried no insurance in 2023, the Insurance Research Council found. Counting underinsured motorists pushes that share to 33.4%, a 10-point jump since 2017.
Insured drivers cover that shortfall through uninsured and underinsured motorist coverage, a standard component of most minimum policies. Bodily-injury claim severity rose 10.3% in 2025 and now accounts for 52% of every liability dollar paid, according to CCC Intelligent Solutions. Legal system abuse added an estimated $91.6 billion to personal auto liability losses between 2015 and 2024, the Insurance Information Institute reported.
What This Means for Your Wallet
The gap between minimum and full coverage is shrinking, and that shift changes the math for millions of drivers. Full coverage averages $186 a month against $98 for liability-only, an $88 monthly difference that has narrowed as minimum prices climbed and full-coverage prices eased. For a driver with a financed or recently paid-off car, that smaller premium gap makes comprehensive protection easier to justify than it was in 2024.
Cutting back to minimum coverage saves less than it used to and buys weaker protection per dollar. States raised their limits precisely because the old floors, such as California's 15/30/5, could not cover the medical bills from one serious crash. A policy that meets the new 30/60/15 standard costs more yet still leaves many drivers exposed once bodily-injury claims, up 10.3% in 2025, run past those limits.
Who Gets Hit Hardest
Insurers spent 2025 swapping across-the-board rate hikes for targeted, risk-based pricing, and that change landed squarely on specific groups. A DUI conviction now raises a premium 35%, lifting the average from $3,305 to $4,461, AutoInsurance.com found. Drivers with poor credit pay 22% more, and teens pay 17% more for the same coverage.
Teenagers carry the steepest absolute cost. A 16-year-old averages $10,387 a year for full coverage in 2026, according to CarInsurance.com. Adding that teen to a family policy can more than double it, from roughly $3,184 to about $7,699 a year, Insurance.com reported.
What You Should Do Now
Roughly one in four drivers cut their coverage in 2025 to manage cost, and 27% of Americans say they cannot afford their deductible, so the urge to economize is real. Rates shift fast in 2026, and a few targeted calls can reset your premium before your next renewal.
Reprice Full Coverage First
With the national gap down to about $88 a month, request a full-coverage quote before defaulting to minimum limits, because the cheaper policy now saves less than many drivers expect.
Re-Shop If Your State Raised Limits
Drivers in California, Virginia, North Carolina, Utah, New Jersey, and Hawaii should compare at least three carriers, since the mandated increase reset everyone's baseline at the same time.
Test Usage-Based Pricing
Ask your insurer about telematics; 90% of drivers in one AutoInsurance.com survey called usage-based pricing fair, and careful drivers often shave 10% to 30% off a premium.
Stack Every Discount
Request good-student, defensive-driving, and bundling discounts, which can offset the minimum-coverage increases for budget-focused households paying $722 or more a year.
Looking Ahead
Insurify projects the national full-coverage average will rise about 1% in 2026, to $2,158, after 2025's 6% drop. Prices are expected to climb in 35 states and fall in 15, so the direction of your renewal depends heavily on where you park. Minimum-coverage costs show no sign of reversing, with Hawaii's higher limits live since January 1 and the uninsured-driver rate still setting records.
Frequently Asked Questions
Full-coverage prices fell about 6% in 2025 for good-credit drivers, but minimum coverage rose 14% because six states raised mandatory liability limits and insurers shifted toward risk-based pricing. A record 15.4% uninsured rate also lifts the uninsured-motorist costs built into minimum policies.
Less than before. The national gap between full and liability-only coverage has narrowed to about $88 a month, and minimum limits buy weaker protection relative to rising bodily-injury claims. Compare a full-coverage quote before switching.
California, Utah, Virginia, and North Carolina raised limits in 2025, and New Jersey and Hawaii raised theirs effective January 1, 2026. California's jump from 15/30/5 to 30/60/15 was its first increase since 1967.
A 16-year-old averages $10,387 a year for full coverage, and adding a teen to a family policy can more than double it, from roughly $3,184 to about $7,699 a year. Good-student and defensive-driving discounts can trim the increase.
Insurify projects a 1% national increase for full coverage in 2026, to $2,158, with rates rising in 35 states and falling in 15. Minimum-coverage costs are expected to keep climbing.
- Insurify - Average Car Insurance Rates as of June 2026
- Insurance Journal - After Falling 6% in 2025, Auto Insurance Cost Will Stabilize in 2026, Says Insurify
- AutoInsurance.com - Auto Insurance Pricing Trends Going Into 2026
- Insurance Research Council - Uninsured and Underinsured Motorists 2017-2023
- Insurance Information Institute - One in Three Drivers Uninsured or Underinsured in 2023
- Insurify / CCC Intelligent Solutions - Bodily-Injury Claims Rising
- Bankrate - States With New Minimum Car Insurance Laws in 2025
- Insurance.com - Minimum Car Insurance Requirement Changes for 2026
- CarInsurance.com - Average Car Insurance Cost by Age
- Insure.com - Most and Least Expensive States for Car Insurance