The Most and Least Expensive States for Car Insurance
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Feel like your car insurance is way too expensive? It might be because of the state where you live. Where you live has a huge effect on your car insurance rates — so much so that the average annual premium for a driver in Louisiana is 123% higher than the average rate for a driver in Maine, according to data from the Insurance Information Institute.
Crazy, right? Why does this happen? Which states have the most expensive car insurance, and which have the cheapest? We’ve got your answers here.
- Average auto insurance rates by state vary drastically.
- Louisiana has the most expensive auto insurance in the US, while Maine has the cheapest average premiums.
- Several factors impact why insurance premiums are different based on the state, including minimum insurance requirements, population density, etc.
Average Car Insurance Rates by State
We know auto insurance rates will vary based on your state. This table ranks each state based on average premium, so you can see where your home falls on the list.
|State||Average Annual Rates||National Rank (by Most Expensive)|
|District of Columbia||$1,440.58||4|
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The 5 Most Expensive States for Car Insurance
Here are 5 states with the highest average auto insurance premiums in the US.
Why is Louisiana Auto Insurance so Expensive?
Louisiana is at the top of the list with the most expensive auto insurance in the United States for several reasons.
- High urban population: More than half of Louisiana residents live in urban areas, which means they also drive more in urban areas. Living in highly populated cities means an increased rate of automobile accidents and auto-related thefts, pushing premiums up.
- High vehicle theft rate: Louisiana has an above-average vehicle theft rate. Thefts increase insurance companies’ costs, so they pass the expense to drivers.
- High highway density: With more drivers on the highways, there’s a greater incidence of vehicle crashes there as well. Highways come with high speeds and even higher accident costs.
Why is Michigan Car Insurance so Expensive?
Coming in at number 2, Michigan is known for its notoriously high auto insurance rates. Here are a few reasons why you can expect to pay more.
- No-fault state: Michigan is exceptionally generous to car crash victims. If you’re poorly hurt in an accident — even if it was your fault — Michigan’s no-fault policy requires insurance companies to pay for all the medical care in addition to reimbursing up to 85 percent of your lost wages (for up to three years).
- Personal injury protection fraud: Due to their no-fault policy, personal injury protection (PIP) fraud is rampant. Attorneys encourage car accident victims to run up significant (and unnecessary) medical bills and then pocket a percentage of them. Some people even fake accidents and split the insurance payout with the doctor or chiropractor.
- Vehicle theft rate: Michigan also has a higher-than-average frequency of vehicle thefts, particularly in certain cities like Detroit.
Why is New York Car Insurance so Expensive?
New York ranks 3rd for the US’s most expensive auto insurance premiums. Here’s why.
- No-fault state: Like Michigan, NY is a no-fault state and requires personal injury protection insurance, which can drive up average costs.
- Mostly urban state: Almost 90% of New York’s residents live in urban areas. So, even if you live in a rural part of the state, your premiums will shoot up because the average cost in the state is high.
- Insurance requirements: New York drivers must carry above-average insurance coverage, including PIP and uninsured motorist insurance. Their minimum insurance requirement limits are
- $10,000 for property damage per accident
- $25,000 for bodily injury and $50,000 for death per person in an accident
- $50,000 for bodily injury and $100,000 for death or all people in an accident
Why is Florida Car Insurance so Expensive?
Ranked the 4th most expensive state for auto insurance, here’s why you can expect to pay more in the sunshine state.
- Insurance requirements: Florida drivers must meet above-average state minimum liability coverage, including $10,000 in property damage and $10,000 in personal property protection.
- Uninsured drivers: 20% of drivers in Florida don’t have auto insurance coverage, much higher than the national average of 12%. Because you’re more likely to be involved in an accident with an uninsured driver, average premiums are higher.
- Average age of drivers: Florida has a large population of student and senior drivers, the two populations that tend to pay more for auto insurance, contributing to the overall higher insurance premiums.
Why is New Jersey Car Insurance so Expensive?
Rounding out our top 5 most expensive states for auto insurance is New Jersey. There are a few reasons why you can expect to pay more.
- Increased healthcare costs: Healthcare is expensive in New Jersey and is only getting more costly. Entities pass on the increased expenses to the drivers.
- High highway traffic density: Many drivers are on New Jersey highways, which increases the likelihood of being involved in a costly accident.
- Population in urban areas: The urban areas in NJ are densely populated, leading to more road congestion and accidents.
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The 5 Least Expensive States for Car Insurance
Here are 5 states with the lowest average auto insurance premiums in the US.
Why is Maine Auto Insurance so Cheap?
Maine is the cheapest state to get auto insurance in the US. Here’s why.
- Low population density: Residents in Maine are spread out, so you’re less likely to find bumper-to-bumper traffic. The low population density leads to less road traffic and fewer accidents.
- Most drivers have insurance: Most drivers in Maine are insured, keeping auto insurance rates low for everyone.
Why is North Dakota Auto Insurance so Cheap?
North Dakota offers the second cheapest average auto insurance premiums for reasons similar to Maine.
- Low population density: North Dakota has a large rural population, so there’s less road traffic and fewer accidents.
- Most drivers have insurance: With most drivers in North Dakota carrying insurance, it keeps costs lower for auto insurance companies which they pass on to drivers.
Why is Iowa Car Insurance so Cheap?
Iowa offers the third most affordable auto insurance rates in the US, for a good reason.
- Rural population: With fewer drivers across the state, there’s a lower likelihood of being involved in an accident.
- Low state minimum insurance: Iowa drivers must meet a lower state minimum auto insurance threshold. $20,000 bodily injury liability per person/$40,000 bodily injury liability per accident/$15,000 property damage liability per accident.
Why is Idaho Car Insurance so Cheap?
- Rural population: Like other states on this list, Idaho is mostly rural, which makes auto insurance more affordable.
- Low state minimum insurance: Idaho also maintains lowers state minimum insurance requirements. Drivers must have $25,000 bodily injury liability per person, $50,000 bodily injury liability per accident and $15,000 property damage liability per accident.
Why is North Carolina Car Insurance so Cheap?
North Carolinians enjoy all the best things in life: great barbecue, beaches, and low auto insurance rates. Here are a few reasons why NC residents pay less.
- Insurance caps: The state caps auto insurance rates. By doing this, insurers must offer discounts to compete.
- Large rural population: Most of North Carolina is rural, so fewer vehicle thefts and crashes occur.
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Factors That Impact Your Auto Insurance Premiums
Now you know which states have the most and least expensive auto insurance rates and some factors that impact those premiums. Now, let’s dive into even more factors that can affect how much you pay for insurance, no matter where you live.
Your Driving Record
Your driving record is an auto insurance factor within your control. The number of tickets and accidents on your auto insurance record will impact your rates, especially if you accumulate too many quickly. The best thing you can do is follow the road rules and stay safe.
Where You Live
Where you reside can impact your auto insurance rates. Living in a high-crime neighborhood will lead to higher rates, while the opposite will drop your premiums. Another factor is whether you park your vehicle in a driveway, street, or garage. Keeping your car in your garage will reduce the likelihood of theft and damage, so you might see lower premiums.
Your Credit Score
Depending on where you live, insurers can use your credit score to determine your auto insurance premium. Studies show that a lower credit score increases the chance you’ll file a claim.
Your Age and Gender
These are factors you can’t control, but they can impact your auto insurance premiums.
Teens and seniors pay more for auto insurance, and men typically pay more than women. That’s because these groups are more likely to exhibit riskier driving habits while behind the wheel. Auto insurance companies pass on the increased risk to them through more expensive premiums.
Your car will also impact your auto insurance premium. Certain vehicles tend to cost more to insure, such as sports cars and luxury vehicles, especially those with higher theft and damage rates.
Percentage of Uninsured Drivers
Drivers without auto insurance raise the rate for everyone since insurance companies will pass on the cost to those with insurance. If you live in a state with a high percentage of uninsured drivers, you’ll pay more.
How State Coverage Requirements Affect Car Insurance Costs?
Along with the above factors, your state’s auto insurance requirements will also impact how much you pay for auto insurance.
Each state has minimum insurance coverage requirements you must meet to drive legally on the road. Those with higher requirements will lead to you paying higher rates, and vice versa if you have lower insurance requirements.
Most states will require that you have a combination of these liability insurance options.
|Liability Coverage||Requirement by State|
|Bodily Injury Liability (BI)||Required in all states except Florida|
|Property Damage Liability (PD)||Required in all states|
|Uninsured/Underinsured Bodily Injury (UIM)||Required in about half of the states|
|Uninsured/Underinsured Property Damage (UIM)||Required in about half of the states|
|Personal Injury Protection (PIP)||Required in 16 states|
The only states that don’t require you to have auto insurance are Virginia and New Hampshire. In these states, you can pay an annual fee to drive without insurance, but you won’t have any financial protection in the event of an accident. Drivers who don’t choose to pay the uninsured motorist fee must meet the state minimum insurance requirements.
Full Coverage Insurance
As the name suggests, full coverage auto insurance provides additional protection in case of an accident or other covered event. Having full coverage means that you add on collision and comprehensive coverages to your liability policy. You might also add higher liability limits.
Unlike liability coverage, states don’t require that you carry full coverage insurance. While adding coverage beyond the liability coverage is recommended to reduce your financial risk, it’s not required to drive legally.
No-Fault vs. Fault States
Another factor impacting how much you pay for auto insurance in your state is whether it’s a no-fault or a fault state.
No-fault states typically charge more for auto insurance than fault states. That’s because in no-fault states, drivers must carry personal injury protection coverage (PIP). PIP covers the driver’s medical bills that occur after an accident and limits whether a driver can sue for damages after an accident.
There are 12 no-fault states; of these 12, 4 appear in the top 5 most expensive states for auto insurance list.
The 12 no-fault states are:
- New York
- New Jersey
- North Dakota
Unlike no-fault states, fault states require that the driver who causes the accident must use their liability insurance to cover the costs of the other driver’s injuries. Though keep in mind that some states require PIP coverage even though they’re not no-fault states.
The Best Way to Lower Your Car Insurance Rates
Wherever you live, you don’t have to accept paying high insurance rates. Whether your driving record is spotty or spotless, you can shop around for better deals and coverage. Here are a few ways to save:
Ask about available discounts
As you shop for car insurance, consider the types of discounts each car insurance company offers. If you qualify for multiple discounts, you could see significant savings. Some discounts are as simple as signing up for automatic bill payments or electronic statements, making it easy to get the lowest rates on your insurance.
Choose a higher deductible
Choosing a policy with a higher deductible can help to lower those premiums a bit.
With a higher deductible, you will be responsible for paying more upfront if you ever need to file a claim. Remember that you must pay that deductible before your insurance policy pays for any expenses. While choosing a higher deductible can save you money on your monthly premiums, it’s important only to choose a deductible that you can quickly pay after an accident or other damage to your car. If you select a high-deductible policy, it’s a great idea to put enough money to pay for the deductible into a savings account, so you know it’s available if you need it.
Keep a clean driving record
Getting a good deal on your car insurance starts with your driving habits. Focus on maintaining a clean driving record free of traffic violations and at-fault accidents. Violations and accidents can stay on your record and increase your premiums for years, so slow down and drive safely.
Work to improve your credit
If you have poor credit, you will often pay more for your insurance because many insurers believe that drivers with poor credit are likely to take other risks, including when they’re behind the wheel. Building better credit is a long-term game but can pay off with lower premiums.
Shop around and compare quotes
As you explore different car insurance companies, it’s essential to take the time to shop around and compare car insurance quotes. Compare.com makes that easy. Fill out a single quote request form, which takes about five minutes. Then, you’ll receive personalized quotes from up to 65 insurance providers, including top companies like those listed above.
You can easily compare the quotes to see which policy offers the best car insurance coverage at the best rates. While it’s always essential to consider factors like the company’s reputation and the claims process, understanding how the rates compare between companies can also help you search for the right car insurance for your needs.
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FAQs About Auto Insurance Rates by State
In what state is car insurance most expensive?
Louisiana drivers pay the most for auto insurance averaging annual premiums of over $1,500.
What US city has the highest auto insurance rates?
As of 2022, Detroit, Michigan, has the highest auto insurance rates in the country. Their premiums are almost 30% higher than the national average.
Does car insurance cover all 50 states?
Yes, if you have an active auto insurance policy, it will cover you in all 50 states.
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