Which States Have the Cheapest Car Insurance?
What Are the Average Car Insurance Rates in Each State?
Car insurance rates change based on which state you live in—and even your city or neighborhood. Every car insurance company calculates its rates differently according to the chances of a claim being made in your area, but below you’ll find the average monthly premiums of car insurance in each state.
You’ll notice that the likelihood of making a claim and paying a higher car insurance premium is greatest in a place like New York, New Jersey, or Michigan. By comparison, you’ll pay much less, on average, in Alabama, Arkansas, or Maine. Look for your state below, and see the differences in car insurance rates based on where you live.
|State||Avg. Monthly Premium|
While these rates will also vary by insurance company and driver, some states bring in higher (or lower) insurance premiums because they have unique laws for minimum coverage. In states with more legal requirements, an insurance company would have to charge higher rates in exchange for more coverage and better protections.
If a state requires less coverage for collision or injury, for example, they would also lower the average monthly premium in the state for all drivers. That’s one of the reasons some states like North Dakota have rates that are half the price of others.
But, no matter what state you live in, you can get the lowest car insurance premium when you use an online authority like Compare.com to research and shop.
Top 5 Cheapest States for Car Insurance in 2021
Idaho, Iowa, Maine, South Dakota, and North Dakota currently have the lowest average monthly car insurance costs. According to our analysis at Compare.com, insurance companies see that fewer drivers in these states make big insurance claims, which make the state riskier to insure.
In addition to that, Iowa requires less coverage for minimum liability insurance, for example, than many others at just $20,000 per person. Per accident, they require only $15,000 for injury and property damage to another person. Other states may require twice as much and influence a higher monthly premium, but the lowest-rate states for car insurance in the table below may also be less risky to drive in from a statistical point of view.
|State||Avg. Monthly Premium|
If you’re in one of these states or you just want to get a great rate on car insurance, use a site like Compare.com to get the lowest car insurance quotes.
Top 5 Most Expensive States for Car Insurance in 2021
New Jersey, New York, Louisiana, Michigan, and Florida command the steepest premiums for car insurance in the country. Insurance companies might have reason to think that these states are riskier to drive in, but they probably hike up rates most because of their laws surrounding car insurance, accidents, and claims.
All five of these top states for expensive car insurance are considered “no-fault” states. That means that if you’re in a car accident, your own car insurance company is responsible for covering injuries and medical bills. It doesn’t matter, legally speaking, who might be “at fault” for the accident because your insurance covers your damages regardless.
|State||Avg. Monthly Premium|
With the “no-fault” laws, these states require you to carry personal injury protection (PIP) which is an “extra” form of insurance protection that other states haven’t made a minimum legal requirement.
Just know that even if you live in a higher-than-average, no-fault state, you can find low-cost car insurance by doing your research and comparing quotes from multiple companies.
Which Company Offers the Cheapest Insurance in Your State?
Using data from Compare.com customers and providers, we’ve found the lowest car insurance companies in every state.
In the most affordable state for auto insurance, Idaho, it turns out that Liberty Mutual is the cheapest car insurance company in the state with an average monthly premium of $59. Plymouth Rock, on the other hand, is the cheapest choice for car insurance in the most expensive state, New Jersey, at $133.61.
Look for your state to discover which insurance company might be the best bet for you to find the cheapest car insurance in your area.
|State||Carrier Name||Avg. Monthly Premium|
|New Jersey||Plymouth Rock||$133.61|
|North Carolina||Liberty Mutual||$69.88|
|Rhode Island||Liberty Mutual||$297.52|
|South Carolina||Liberty Mutual||$118.72|
|West Virginia||Liberty Mutual||$81.44|
|Washington D.C.||Liberty Mutual||$158.26|
You’ll notice that these averages for the lowest-cost insurers in each state don’t line up perfectly with the state average. That’s simply because other insurers charge more in that state and some drivers get even better rates than the average driver, shifting the price up or down.
But it will give you a good idea of who is offering the most affordable insurance in each state. And if you want to see which company will offer you the best rates where you live, simply enter your ZIP code below.
Why Do Car Insurance Costs Vary by State?
The cost of car insurance changes from state to state mostly because state laws vary and claim incidents differ. Only insurance companies know all the statistics they use to calculate their car insurance premiums, but let’s look at the state laws around car insurance and the claim factors that could impact your rate.
Every state sets its requirements for minimum car insurance coverage differently. States that require a higher amount of liability or personal injury protection (PIP) will often drive up the cost of insurance compared to other states with fewer requirements.
States also set expectations for car insurance companies and when they are expected to pay for claims made. For example, many states that have the highest car insurance premiums are also “no-fault” states where insurers are expected to pay for your injuries and medical costs regardless of who is “at fault.”
Then, there are other statistics that matter, especially if your state has many urban areas or a high rate of uninsured drivers. Car insurance companies may set rates higher if you live in a major city where the chance of your car being stolen or getting into an accident is higher. But, they can also charge more if they know there are a lot of uninsured drivers on the road because this poses major risks to them when it comes time to pay a claim.
If you’re thinking about a move, it may be a good idea to look into how this could change your car insurance premium and who you should use to find a low car insurance rate.
How Moving to a Different State Might Affect Your Car Insurance
Even if you stay with the same car insurance company, your premium could change drastically after you move from one state to another. Because the new state may have different laws, this could raise the cost of car insurance (or lower it) to meet the minimum insurance requirements. The regulations for insurance companies and what they’re responsible for paying may change as well.
More than this, your move poses other questions for the insurance company to look into and calculate. You might commute a different amount than you did before, you may need a different vehicle, or you might move to an area with a much different risk level than the previous neighborhood (in addition to crossing state lines).
Your current car insurance company may not offer coverage in your new state even if you were happy with their premium. You can use Compare.com to see the car insurance companies and premiums available before you move states.
How to Handle Updating Your Car Insurance When Moving to a New State
You only have 30 to 90 days to register yourself as a driver with an insured car in a new state. Take the time to research the lowest rates in the area with our list above, and learn about the unique legal requirements of your new state. Then, follow our three simple steps below to successfully move states and stay fully insured.
Update Your Drivers License and Vehicle Registration
Each state and DMV has its own requirements for updating your license and vehicle registration. In general, you want to notify the office of your recent move and apply for a new driver’s license. As part of that process, you’ll need to fill out their application form and pay the local fee. Your driver’s license will then arrive by mail at your new address.
To register your vehicle, visit the local DMV to fill out a title and vehicle registration application. Fees vary, but you can expect to pay up to $60 to submit the applications. When your application is approved, you’ll receive your new plates and mail the old ones to your former home state.
Tell Your Current Company Your New Address
Whenever you move, to keep your policy valid, you want to let your car insurance company know. (It could save you money.) This makes sense for drivers and insurers who agree that every part of their agreement and the driver’s information is true and correct.
When you’re planning on moving states, let your car insurance company know your future address to see if there’s the possibility that they can insure you in your new home. Even if they can, research rates from other companies since premiums and insurance companies can change significantly when you cross state lines.
Compare Rates from Car Insurance Companies in Your New Home State to Save Money
As you can see from comparing states with the most expensive rates to the least expensive above, car insurance can be half as much or twice as expensive in some areas. You might be able to stay with the same insurer, but you may want to switch car insurance companies to save money—especially if another company gives you a cheaper insurance premium in the new state.
You can start comparing premiums now with Compare.com. All you have to do is enter a zip code for the new state and area where you’ll live to get instant quotes for low car insurance.
Why is Car Insurance More Expensive in My State?
Car insurance premiums go up and down based on driver-based factors as well as where they live. In addition to looking at your driving record, your age, vehicle type, and general profile as a driver, insurance companies will also analyze your location. The difference between one state or region and another can equal thousands of dollars because of state laws, incident rates, and even the chance of natural disaster.
State Minimum Limits
From New York to California and Florida to Washington, you’ll see massive differences in what is considered the “state minimum” level of auto insurance coverage. The amount of car insurance you need changes not only in the amount of expected coverage, but some also expect additional forms of insurance, such as personal injury protection and uninsured or underinsured driver insurance.
This all means that you’ll pay for more insurance in one state than another just to meet state requirements. For example, if you moved from Iowa to Indiana, you’d suddenly need an additional $50,000 in coverage for uninsured motorist injury per accident.
Differences in driving laws mean that insurance companies view some states as safer than others, but they also mean that their drivers may have different incident records and traffic statistics for an insurance company to consider.
Changes from state to state in parking tickets, fines, and fees of all kinds may impact the profile of the state and its drivers for the insurance company to use in raising rates. If a state has more incidents, it looks like more of a risk to an insurance company, and this means changes to their auto insurance rates.
No-fault vs. Fault States
In some states, like New York, New Jersey, and Florida—“no-fault” insurance is required. This form of personal injury protection covers the cost of your medical expenses, funeral costs, injury expenses, and even lost wages, no matter who is responsible for the car accident. Because some states are “no-fault,” they can cause car insurance rates to go up due to additional coverage requirements.
In “fault” states, insurance companies are only expected to pay damages according to who is at fault and how much they are at fault for the accident. For the driver who caused the accident, the insurance company would be expected to pay the personal and property damages of the other person.
Traffic accidents and incidents vary from neighborhood to neighborhood, city to city, and state to state. And no matter what, insurance companies do take note. When calculating a rate for you in a new state, the insurance company will look at the incidents in the entire state as well as your specific zip code to determine what’s fair for the risk they take on by insuring you.
Because they analyze everything from construction collisions to rear ends and interstate accidents, it’s hard to be sure what accidents look like in a different city or state (unless you’re an insurance company). You may pay less in a less populated state than you would in a highly populated one, but it all depends on the habits of the drivers in that state.
Just like traffic incidents, certain states are known for more crime than others. There may be more vehicle thefts, for example, in one state than another, and this contributes to a state-wide crime rate. That rate applies to every driver in the state looking for auto insurance. Auto insurance companies don’t just look at car thefts though because they also consider the total number of claims made for things like vandalism, property thefts, false injury claims, and more.
By looking at police reports and statistics on car thefts and other crimes, insurance companies determine rates that they can tolerate based on the data. This will give you either a higher or lower premium every month.
Frequency of Natural Disasters
Each state presents different natural weather conditions and geographic features. If a state is known for floods, monsoons, tornadoes, or hurricanes, the insurance company may want to increase your rate. They could also give you a lower premium if you move to a region with a lower rate of extreme conditions or natural disasters.
Frequently Asked Questions
Which state has the lowest car insurance rates?
Idaho currently has the lowest average car insurance premium at $48.00 per month for coverage at the legal minimum. For that average rate, Idaho drivers have, at a minimum, $50,000 in bodily injury liability insurance per accident, $15,000 in property damage liability protection per accident, and $50,000 in uninsured motorist coverage per accident.
Which state has the highest car insurance rates?
New Jersey carries the highest average car insurance premium at $106 per month. New Jersey is a “no-fault” state that has made it a legal requirement for all drivers to carry their own personal injury protection. So, in New Jersey, no matter who causes the accident, each driver’s PIP insurance pays for their expenses like medical bills, lost wages, and other included costs.
What states don’t require car insurance?
Many people think car insurance is required in every state, but some haven’t made it a legal requirement to drive. Only New Hampshire and Virginia don’t require car insurance, but that doesn’t mean that you escape costs if you’re in a car accident. Instead, getting into an accident means you could be held financially responsible for all damages. If you can’t pay in one of these states, you could lose your license.
Does ZIP code affect car insurance?
Moving ZIP codes and addresses can be similar to moving states, but on a much smaller scale. Car insurance companies look at it the same way. They’ll compare the crime rates, traffic incidents, and statistical features of one ZIP code to another to come up with a new insurance premium that fits the level of risk in that area. The ZIP code could be one where there are a large number of insurance claims made for injuries, stolen cars, property theft, or vandalism. And, all those could affect your car insurance premium.