Car Insurance Rates by State: Are You Paying Too Much?

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Insurance rates by state: asphalt road

Several factors determine your auto insurance rates, but did you know that where you live plays a pivotal role in the price of your policy? That’s right — your ZIP code or where you live can profoundly affect how much you pay. Even assuming all things the same, living in one state compared to another may result in substantial savings or higher rates.

You may want to know where you can move to save money. Or perhaps you’re just curious where insurance coverage is cheapest or the most expensive. Either way, in this article, we’ll cover what you need to know about car insurance rates by state.


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Why Does Location Affect Car Insurance Rates?

Woman driving a car

Location is only one factor that affects car insurance rates, but few people question why. The fact of the matter is that your location — including state, city, and ZIP code — reveals statistics and details that help insurance companies compile your insurance rates.

The auto insurance industry and third-party companies, such as the Insurance Information Institute or Quadrant Information Services, continuously gather statistics to determine your risk as a driver. From a location perspective, your rates can go up or down depending on factors such as:

  • The percentage of uninsured drivers in a particular state
  • Cost of living
  • Repair costs for vehicles in a particular area due to wages or prices of parts
  • Insurance claims from your state or location
  • Weather-related damage claims
  • Road conditions in a specific area
  • Traffic density and population density
  • Minimum insurance requirements in your state
  • Vandalism, car theft, property damage, and location-specific crime statistics
  • Whether you live in an at-fault or no-fault state

Add all of these contributing factors together, and the insurance company can give you an accurate quote based on something as simple as a ZIP code.

What Other Factors Affect Car Insurance Rates?

Location isn’t the only factor that affects auto insurance rates by state. Several other elements can change how much you pay for auto insurance premiums. Some other aspects that can significantly impact your annual premium are:

  • Marital status
  • Credit score
  • Clean driving record/driving history, including speeding tickets, moving violations, and DUIs
  • Type of insurance coverage
  • Claims history
  • Age and gender
  • Amount of your deductible
  • Education level
  • Number of auto insurance fraud cases
  • Whether you currently have car insurance or you have a lapse in coverage

Every insurance company uses these data points on top of your location, although they’re tight-lipped about which categories affect your rate more than others.

You can often improve these factors, but changing your location isn’t nearly as easy. But if you can keep a clean driving history, maintain good credit, and even keep a higher deductible, you can ultimately save money no matter where you live.

Average Car Insurance Rates by State

Car on the Monument Valley highway in Utah

Using the criteria above, car insurance companies can create a better idea of risk per driver based on the perceived level of claims, repair costs, and the likelihood of a claim. Once that’s calculated, they come up with their policy numbers. As of 2019 — the last year statistics were published — the national average for full coverage car insurance premiums, which includes liability coverage, collision coverage, and comprehensive coverage, is $1,070.47.

Breaking that number down even further, here are the annual average car insurance rates by state for full coverage based on statistics from the Insurance Information Institute and where they rank nationally (the greater the number, the cheaper the rate):

State Average Annual Rates National Rank (by Most Expensive)
Alabama  $906.36 31
Alaska  $965.45 23
Arizona  $1,063.93 18
Arkansas  $897.92 32
California  $1,051.79 19
Colorado  $1,174.87 14
Connecticut  $1,237.55 11
Delaware  $1,289.93 9
District of Columbia  $1,440.58 4
Florida  $1,414.17 5
Georgia  $1,259.49 10
Hawaii  $839.87 37
Idaho  $738.10 48
Illinois  $939.64 26
Indiana  $777.05 43
Iowa  $714.86 49
Kansas  $818.99 39
Kentucky  $935.61 27
Louisiana  $1,557.22 1
Maine  $696.37 51
Maryland  $1,236.61 12
Massachusetts  $1,182.69 13
Michigan  $1,495.94 2
Minnesota  $892.17 33
Mississippi  $975.58 23
Missouri  $929.91 30
Montana  $834.86 38
Nebraska  $807.30 40
Nevada  $1,292.52 8
New Hampshire  $864.35 34
New Jersey  $1,395.53 6
New Mexico  $932.67 28
New York  $1,445.30 3
North Carolina  $741.70 47
North Dakota  $703.73 50
Ohio  $802.72 41
Oklahoma  $908.95 31
Oregon  $990 22
Pennsylvania  $992.33 20
Rhode Island  $1,382.64 7
South Carolina  $1,114.90 16
South Dakota  $745.33 46
Tennessee  $863.39 35
Texas  $1,143.85 15
Utah  $954.14 24
Vermont  $785.37 42
Virginia  $861.18 36
Washington  $1,066.84 17
West Virginia  $946.03 25
Wisconsin  $767.42 45
Wyoming  $776.22 44

Although you may have only looked for your state, a glance at the overall list seems like there’s no rhyme or reason to where you can get cheaper auto insurance. However, the factors listed above, like cost of living, the number of uninsured drivers, and state minimum auto insurance requirements, all play a central role in the price of car insurance coverage.

The Cheapest Car Insurance Rates by State

Insurance rates by state: road lined with trees

The cheapest states for car insurance are Maine, North Dakota, Idaho, Iowa, and North Carolina. However, the reason is clear: They’re all relatively rural. From there, it’s simple math. Fewer people lead to fewer accidents which result in fewer claims. That’s why these states have remained hotbeds for cheap car insurance over the last few years.

The only true outlier is North Carolina, but there’s a reason why it’s near the top of the best car insurance rates by state: The state government caps car insurance rates to keep them reasonably affordable from providers, contingent on maintaining a clean driving record. Get into an accident in the Tarheel State, and you may see your rates increase dramatically.

The Most Expensive Car Insurance Rates by State

Country road in Louisiana

Because the cheapest car insurance rates by state tend to be from rural areas with fewer car accidents, it’s only natural to assume that urban states would be the opposite. But that’s not exactly the case.

The most expensive states for car insurance are Louisiana, Michigan, New York,  and Florida, as well as D.C. Three are densely populated, so increased insurance rates make sense. However, Louisiana and Michigan may seem like a bit of a conundrum.

The reason these two have the highest average cost of car insurance is simple: a greater rate of uninsured drivers.

For years and years, Louisiana had the highest rate of uninsured motorists, teetering right around 20%. But after the passing of legislation that allows law enforcement to impound cars if a driver can’t show proof of insurance even on the first offense, that number is down to 11.7%. Still, rates have yet to catch up with these promising figures.

On the other hand, Michigan has the second-highest rate of uninsured drivers. According to statistics, around a quarter of all drivers don’t have insurance, which can make driving a little nerve-racking and cause insurance rates to soar. Michigan hasn’t implemented any new legislation, so it may remain one of the most expensive places for car insurance nationwide.

Comparing Quotes: The Best Way To Lower Auto Insurance Rates

When you’re shopping for a car insurance policy, don’t take the average insurance rates by state as gospel. You can always find the car insurance coverage you need at an affordable price by consistently checking car insurance quotes. The best place to do it is with Compare.com.

Whether you’re looking for the cheapest rate in affordable markets like Maine or Idaho or want to reduce high costs on minimum coverage in Louisiana or New York, Compare.com allows you to peruse multiple quotes in seconds.

Enter your ZIP code below to see if you can get a rate below your state’s average. It’s an exciting game that’s always fun if you can win. Good luck!


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