Which States Have the Cheapest Car Insurance Rates?

States like Nebraska, Wyoming, Wisconsin, Idaho and Vermont have some of the lowest car insurance rates in the country, with select insurers offering minimum coverage for an average cost of around $330 to $360 less than the national average.^[1][2] Numerous factors can cause car insurance premiums to be lower in one state than another including each state’s laws, economic climate and exposure to various kinds of covered losses.

Keep reading to learn more about the states with the cheapest car insurance policies and the steps you can take to lower your premium if you live in one of the more expensive states for auto coverage.

On This Page

• 

  Why Do Car Insurance Rates Vary From State to State?

• 

  Cheapest Car Insurance Rates by State

• 

  How Do I Keep My Car Insurance Rates Low Where I Live?

• 

  FAQs

Why Do Car Insurance Rates Vary From State to State?

Auto insurance rates vary from state to state because each state sets its own car insurance requirements, meaning the cost of minimum coverage in your state depends on what types of coverage the government requires you to buy and how high the minimum coverage limits are. You can also expect car insurance companies to take other state-specific or ZIP-code-specific factors into account when underwriting your policy such as regional weather patterns and the cost of medical treatments and property repairs in your area.

Additionally, the rates of uninsured drivers, car accidents and crimes in your state can influence how much you have to pay for auto insurance since they may indicate how likely you are to file a car insurance claim. Issues like these may be more prevalent in regions with a higher population density, so car insurance coverage is often more expensive in urban areas than in rural areas.^[3]

Cheapest Car Insurance Rates by State

See the below table for an overview of the cheapest car insurance companies that offer the lowest median annual premiums for minimum coverage car insurance in each state, ordered from cheapest to most expensive.^[1]

States With Cheapest Car Insurance on Average

In the following states, the statewide average car insurance cost for minimum coverage across all insurance carriers is more than $100 lower than the national average cost of $487 per year, making them some of the cheapest states for car insurance across the board:^[2]

Meanwhile, the following states have an average premium for full coverage car insurance that is more than $300 lower than the nationwide average of $1,717 per year:^[2]

Unsurprisingly, Wyoming stands out as the state with the cheapest car insurance rates for both minimum coverage and full coverage. Factors that contribute to Wyoming’s low car insurance prices include the fact that it has the smallest population of any state and that its state government only requires drivers to carry liability coverage.^[4][5]

How Do I Keep My Car Insurance Rates Low Where I Live?

Regardless of what state you live in, the best way to find low car insurance rates is by comparing quotes from around three to five different insurance companies to see which insurer can offer the best price for the coverage you need. You can click here to start shopping around for auto insurance through SmartFinancial at no cost.

Another way you could potentially save money is by opting into a telematics or pay-per-mile car insurance program, which can lead to lower premiums if you consistently practice safe driving habits or rarely drive at all. In addition, raising your deductible will typically lower your car insurance rate since your insurance provider won’t have to pay as much money whenever you file a claim.

Of course, you should also look into car insurance discounts that your insurance company offers and see if you are already eligible or could easily qualify for any of them. Examples of common discounts include the following:

• Safe driving: As a general rule, good drivers pay less for auto insurance since they cost their insurance providers less money. If you go several years without filing any claims, getting into any car accidents or committing any traffic violations, your insurance rates may go down.
• Good student: Many insurers offer discounted rates on policies that cover good students who maintain a high grade point average (GPA). Typically, you can qualify if you or your child has a GPA of 3.0 or better.
• Anti-theft: It may be beneficial to install an anti-theft device such as a kill switch, car alarm or GPS tracker into your vehicle. Since these devices can lower the odds that you will need to file a claim related to theft, your insurance company may give you a discount on your insurance policy if you install one or more.
• Bundling: If your car insurance company also sells other insurance products like homeowners insurance or renters insurance, you can likely secure a bundling discount by purchasing multiple policies from the same carrier.
• Multi-car: Assuming your family owns multiple vehicles, one of the simplest ways to earn discounted insurance premiums is to add all of the drivers in your household and all of their cars to the same policy. Keep in mind that your insurer may limit the number of cars it will cover to four or five per policy.^[6]