Average Cost of Car Insurance in MN in 2025

If you're shopping for car insurance in 2025, you're probably wondering: What’s the average cost of car insurance in Minnesota right now? With rates shifting due to inflation, vehicle technology, and driving trends, knowing what others are paying helps you gauge whether you're getting a fair deal or overpaying.

At First State Insurance, we help drivers in both Minnesota and South Dakota find affordable, reliable coverage tailored to their needs. In this blog, we’ll break down the latest average costs, explore what affects your premium, and share tips to help you save.

 What Is the Average Cost of Car Insurance in Minnesota in 2025? 

According to the most recent data from the Zebra and Bankrate, the average cost of car insurance in Minnesota in 2025 is around $1,850 per year, or about $154 per month for full coverage. That puts Minnesota just above the national average, which sits near $1,750 annually.

If you’re only carrying state-minimum liability coverage, your average cost in this state drops to about $730 per year, or roughly $61 per month. However, this type of policy may not fully protect you in the event of a serious accident or lawsuit.

Meanwhile, drivers in South Dakota pay slightly less, around $1,580 per year for full coverage, making it one of the more affordable states in the region.

 Why Are Car Insurance Rates Higher in Minnesota? 

A few key factors explain why drivers in Minnesota often pay more for car insurance:

• Winter weather and icy road conditions lead to a higher rate of accidents and claims, especially between November and March.

• Urban areas like Minneapolis and St. Paul see more frequent collisions and thefts, which insurers factor into premiums.

• Rising repair costs, especially for vehicles with advanced safety features or electric models, continue to push premiums higher across the state.

• Higher rates of uninsured drivers also impact costs. According to the Insurance Research Council, nearly 10% of Minnesota drivers are uninsured, which drives up costs for those who follow the law.

 What Impacts Your Car Insurance Premium? 

Even though we’re talking about averages, the actual cost of car insurance in MN depends on personal factors, including:

 1. Location 

Drivers in Worthington may see slightly lower premiums than those in the Twin Cities. Similarly, Sioux Falls, a rapidly growing city, has moderate rates that reflect both its size and solid infrastructure.

 2. Driving Record 

A clean driving history can lower your premium by up to 40%. On the flip side, just one speeding ticket or accident can cause a spike that lasts for years.

 3. Vehicle Type 

Luxury vehicles, high-performance cars, and electric vehicles (EVs) tend to cost more to insure. In contrast, common sedans and mid-size SUVs, like Honda Accords or Toyota RAV4s, are usually cheaper to cover.

 4. Credit Score 

Minnesota insurers are allowed to use credit-based insurance scores, which means your financial habits could influence your rate. However, some states like California ban this practice.

 5. Coverage Level & Deductible 

Choosing full coverage with a low deductible costs more, but it also offers better financial protection. In contrast, people with older cars may opt for liability-only policies to reduce premiums, but that can be risky. Ultimately, every driver’s rate will differ based on location, age, and driving habits. If you live near the state border or commute across state lines, it may be worth comparing options in both states with an agency like First State Insurance that serves both markets.

 Can You Lower Your Car Insurance Costs in MN? 

Absolutely. Here are a few proven ways to reduce your premium without sacrificing coverage:

• Bundle your policies: Combine auto, home, or renters insurance with First State Insurance for discounts of up to 20%.

• Take a defensive driving course: Some insurers offer lower rates for drivers who complete approved training.

• Increase your deductible: If you can afford to pay more out-of-pocket in a claim, you may lower your premium.

• Shop around regularly: Don’t let auto-renewals keep you locked into outdated pricing. Rates change often, and better deals may be available.

• Ask about low-mileage discounts: If you work remotely or have a short commute, your insurer may reward you with lower rates.

 Should You Ever Choose the Cheapest Policy?

Althoug saving money is always a priority, it's not recommended to choose the cheapest car insurance, since it could expose you to major risks. Before choosing a policy based on a low price, take into consideration this:

• Minimal liability coverage may not cover all damages in a serious accident.

• No collision or comprehensive coverage means you’re on the hook if your car is stolen, vandalized, or totaled in a crash.

• No uninsured motorist protection could leave you paying out of pocket if hit by someone without insurance.

• Remember: The best policy isn’t always the cheapest. It’s the one that balances affordability with reliable protection.
  

 Personalized Coverage from a Local, Trusted Agency 

Whether you’re navigating snow-covered highways in Worthington or cruising through new developments in Sioux Falls, First State Insurance offers custom policy reviews, access to top-rated national carriers and local service from agents who know your roads and risks. Our clients choose us because we take time to explain coverages clearly, and help you compare real quotes that match your needs.

 Final Thoughts: Know the Average, Then Call Us 

Summarizing what was discussed, the average cost of car insurance is around $1,850/year, but be ware, this is just an estimate, and your personal rate could vary widely. From vehicle type and coverage limits to driving record and zip code, it pays to speak with a local agent who understands your unique profile.