Car Insurance Rates by State
If we’re honest, car insurance is one of the most annoying expenses. There’s no immediate benefit since you maintain coverage to protect other drivers. And in most states, you’re required to have coverage by law.
Car insurance premiums vary considerably from one state to another, and that’s why knowing car insurance rates by state is so important.
You can do all that you can on a personal level to keep your car insurance premiums as low as possible. But even after doing all that, premium levels in your state may be the single biggest reason for the cost of your policy.
Let’s drill down and take a close look at auto insurance rates by state, then see what you can do to minimize your premium.
IN THIS ARTICLE:
What Is The Average Cost of Car Insurance by State?
Here is a complete list of average auto insurance rates for each state, ranked from the most expensive to the cheapest:
|State||Average Annual Premium|
|5. District of Columbia||$1,876|
|7. Rhode Island||$1,834|
|9. New York||$1,789|
|20. New Jersey||$1,520|
|21. West Virginia||$1,472|
|23. South Carolina||$1,433|
|27. New Mexico||$1,382|
|36. South Dakota||$1,262|
|43. North Dakota||$1,164|
|45. North Carolina||$1,095|
|46. New Hampshire||$1,087|
This list was published on Insure.com on April 16, 2019, and has not yet been updated for 2020.
Comparing Car Insurance Rates by State
To put the above auto insurance rates by state in perspective, Insure.com also reports that the national average premium is $1,457.
But what’s striking about this list is the disparity from the lowest to the highest. Maine has the lowest annual premium, at $845, while Michigan is the highest, at $2,611.
That means the cost of carrying auto insurance in Michigan is more than three times what it will cost in Maine.
What Factors Determine Car Insurance Rates?
Though much of the reason for high car insurance premiums have to do with big picture factors affecting those premiums at the state level, individual factors play a significant role in how much you will pay for your policy.
Naturally, your premium will be higher if you carry $300,000 in liability coverage than if you carry just $50,000.
Even as there are major differences in premiums between states, there are also significant variations within each state. The city – or even a certain ZIP Code – may have higher premiums than a small town or different ZIP Code.
A person who has a daily round-trip commute of 10 miles will pay less than someone with a 100-mile commute.
Both younger (generally, under 25) and older drivers pay higher premiums, due to higher risks associated with both age groups.
Since men have a higher incidence of accidents, you’ll often pay more as a man than you will as a woman.
This is the single biggest premium factor that’s within your control. If you have multiple claims and moving traffic violations within the past three-to-five years, your premiums can be considerably higher than if you didn’t.
An occupation that has you on the road more frequently, such as a traveling salesman, will pay a higher premium than someone who simply commutes to and from work.
Auto insurance companies have determined that lower credit scores are more closely associated with more frequent claims.
Some of these factors are within your ability to control. But others are not, or may require changes in your behavior or your coverage levels.
Why Are Some States Cheaper for Car Insurance?
No one factor decides what states have the cheapest car insurance. There are several factors, as well as matters of degree within each.
For example, population density is a major factor. Simply put, the less crowded a state is, the lower the likelihood of crashes. That doesn’t mean the state with the lowest premiums will be the one with the lowest population density. If that were the case, Alaska – ranking number 40 on the list – would have the lowest premiums by far.
But it may have more to do with population disbursement within a state. If a state has a small population, but most of it is concentrated around two or three primary cities, there’s a high-density level, despite the overall low population. For that reason, it’s not surprising that states like Maine, Idaho, Iowa, New Hampshire, Vermont, and North Dakota are among the 10 states with the lowest car insurance rates.
While every state except New Hampshire makes car insurance mandatory, the specific required provisions vary under each state’s laws. For example, one factor that can affect premiums is the required level of coverage, as well as certain coverage provisions that may not be required in other states.
Frequency of Claims
Much of this can be attributed to the population density issue, but there may be other factors as well. For example, areas where there are frequent and extended traffic jams or more miles of high-speed roadways, are likely to have more accidents. That will result in more claims and higher premiums.
Frequency of Lawsuits
This issue is closely linked to state laws. Simply put, it’s easier to institute a lawsuit in certain states than in others. The more common those lawsuits are, the higher the premiums will be.
Why the Most Expensive States for Car Insurance are the Highest
Each factor listed above also contributes to high premiums in the most expensive states for car insurance. But there are other factors that have a more specific impact on those premiums.
The cost of auto insurance is naturally closely connected to coverage amounts. For example, part of the reason Michigan has the highest premiums in the country is that they guarantee unlimited, lifetime medical benefits to accident victims. By contrast, most states that require personal injury protection coverage have established limits.
The number of uninsured drivers in a state:
States with a high percentage of uninsured motorists will have higher premiums. That’s because if you’re involved in an accident with another driver who has no coverage, you’ll need to file a claim with your own insurance company. That will result in higher premiums.
No-fault Auto Insurance & The States That Require It
The term, no-fault auto insurance, may lead you to believe it will result in lower car insurance premiums, but that’s not always the case. In a no-fault system, drivers are required to file a claim with their own insurance company, regardless of who the at-fault party is.
No-fault also requires drivers to have personal injury protection (PIP), which adds to the cost of the policy. States have enacted no-fault provisions to limit the ability of drivers to sue one another.
No-fault is a provision in the following 12 states:
- New Jersey
- New York
- North Dakota
It’s not a coincidence that Michigan, Florida, New York, Kentucky, and New Jersey have car insurance premiums that are above the national average. Curiously, however, Utah, Pennsylvania, and North Dakota have among the lowest rates in the country. But the reason for this apparent contradiction is that no-fault laws have specific provisions in each state that have a significant impact on auto insurance premium levels.
All of the above may help you to better understand why auto insurance premiums may be as high as they are in your state. But none of it helps you to get cheaper car insurance.
8 Tips to Lower Your Car Insurance Premium – No Matter Where You Live
Short of moving to a state with lower car insurance – which could help you decide which one to move to if you’re on the fence – how can you lower your car insurance premium?
1. Increase your deductible
Raising your deductible from $500 to $1,000 can produce a significant reduction in your premium. But make sure you have sufficient funds in savings to cover the difference.
2. Choose your vehicle wisely
More expensive vehicles generally cost more to insure due to the higher cost of collision and comprehensive coverage. The same is true for sports cars and specialty vehicles. Before buying your next vehicle, find out what it will cost to insure. Also, be aware that certain safety equipment will reduce your premium.
3. Keep a clean driving record
In most states, the best auto insurance companies will consider you to be a good driver if you go at least three years without an at-fault accident or a moving traffic violation.
4. Take a safe driver course
If you have an at-fault accident or moving violation, check with your insurance company to see if they have an approved safe driver course. Some auto insurance companies will reduce your premium if you complete such a course.
5. Take advantage of every discount available
There are discounts for just about everything – safety equipment on your vehicle, low annual mileage, customer loyalty, multiple vehicles on the same policy, good grades – you name it. Check with your insurance company to see which discounts they offer that may apply to you.
6. Bundle your auto insurance with other policies
You can usually get a substantial reduction in your premium if you bundle your auto insurance with other policies, like homeowner’s or renter’s insurance, business insurance, and other policies.
7. Maintain good credit
A higher credit rating will make you appear as a lower risk to the insurance companies. If your credit score is low, work to increase it, then contact your insurance company and request a re-evaluation.
8. Shop, shop, shop!
Auto insurance companies don’t stay competitive forever. Some increase their premiums, while others decrease them to gain market share. Periodically you should shop to take advantage of the companies offering less expensive coverage.
Know Your State’s Auto Insurance Rates
As you probably were aware before you even read this article, car insurance is a complicated subject. Not only are there big picture issues, like car insurance rates by state and the factors that cause them, but there are plenty of individual issues contributing to the premium you’re paying.
You can’t change the laws in your state, but by being aware of them, you can put yourself in a better position to minimize your premium. And there’s certainly plenty you can do on an individual level, which is where you really need to concentrate your efforts. In most states, car insurance premiums are too high to do otherwise.