Which States Pay the Most in Car Insurance?

Fran
Lucy Lazarony
November 24, 2020

Where you live makes a big difference when it comes to the cost of car insurance. Do you live in an expensive state for car insurance or a cheap one? Not sure? Here’s a look at the top 5 most expensive states, led by Michigan and the cheapest states, led by Vermont as reported by Business Insider. Let’s begin with Michigan. Michigan has the most expensive car insurance rates in the whole country. Michigan’s average auto insurance rate is $2,239 per year, which is 64 percent higher than the national average of $1,365. Why is auto insurance so high in Michigan? There was a law that required all drivers to buy unlimited, lifetime medical coverage for car accident injuries. This led to costly medical claims, and fraud and legal battles among insurers, medical providers and policyholders over what was covered and how much it would cost. But thanks to a new law that took effect in July 2020, drivers have a choice about the Personal Injury Protection (PIP) that they choose. They can still buy the unlimited option if they wish but they have other cheaper options as well. There is hope that this new law will lead to lowering the cost of car insurance premiums in Michigan. But for now, the state remains at the top for costs of car insurance premiums in the United States.

States that Pay High Car Insurance

1. Michigan

Michigan is tops by but these four states have pretty high car insurance rates as well.

2. Louisiana

In Louisiana, the average yearly car insurance premium is $2,126, which is 56 percent higher than the national average. Why is car insurance so high in Louisiana? A high rate of uninsured drivers and a high rate of auto litigation are the culprits. Both these factors cause high car insurance rates in Louisiana.

3. Florida

In Florida, the average annual car insurance premium is $2,050, which is 50 percent higher than the U.S. average. Why are the car insurance rates so high in the Sunshine State? You’ll pay higher than average car insurance rates in Florida because of the relatively high share of uninsured drivers on Florida roadways. Almost 24 percent of Florida drivers have no liability auto insurance.

4. Rhode Island

In Rhode Island, the average yearly auto insurance premium is $1,852, which is 36 percent higher than the national average. In Rhode Island, population density leads to more accident claims, there are uninsured motorists on the roadways and body shop repairs and labor costs are high. All these factors contribute to the higher car insurance premiums in Rhode Island.

5. Connecticut

In Connecticut, drivers pay an average annual auto insurance premium of $1,831, which is 34 percent higher than the U.S. average. Why are car insurance rates so high in Connecticut? The state’s affluence impacts its auto insurance premiums. Connecticut auto insurance customers have more expensive vehicles to insure and they also buy higher limits of liability coverage. This adds up to higher auto insurance premiums. In addition, Connecticut has a high density population in its urban areas and this results in more traffic accidents and more congested roadways. More accidents mean high auto insurance rates.

States that Pay the Least for Car Insurance

Here are the top 5 states, led by Vermont with the cheapest car insurance premiums in the United States. Drivers in these states have the best car insurance premiums in the whole country.

1. Vermont

In Vermont, drivers pay an average yearly auto premium of just $932, which is 32 percent less than the national average. Why are auto premiums in Vermont so low? Vermont is a rural state, it has a low number of uninsured drivers and its small population is spread out. All these factors give Vermont the lowest car insurance rates in the country.

2. Ohio

In Ohio, drivers pay a yearly auto premium of $944 per year, which is 31 percent less than U.S. average. Why is auto insurance so cheap in Ohio? Ohio has a population of safe drivers and a very competitive auto insurance marketplace. All the competition between insurance companies drives down insurance rates for Ohio drivers.

3. Idaho

In Idaho, the average annual auto insurance premium is $989, which is 28 percent less than the national average. As with Vermont, Idaho has a small population. This small population leads to fewer auto accidents and fewer insurance claims. Both these things drive down auto insurance rates.

4. Virginia

In Virginia, drivers pay a yearly auto insurance premium of $1,013, which is 26 percent less than the U.S. average. Why is car insurance so inexpensive in Virginia? There are large numbers of insurance companies doing business in Virginia and competition drives down auto insurance rates. Also, car repair costs are low in Virginia. Both these factors lead to low auto insurance insurance premiums for Virginia drivers.

5. Iowa

In Iowa, the yearly auto insurance premium is $1,025, which is 25 percent less than the national average. As with Vermont and Idaho, Iowa has a small population. This small population results in fewer car accidents and few auto insurance claims. These factors lead to lower auto insurance premiums.

Ways to Save Money on Car Insurance

Wherever you live, these money-saving tips will help to lower the cost of your car insurance premium.

Pay Once or Twice a Year. Rather than signing up for monthly payments with your car insurance, pay the annual amount or six-months amount instead. Auto insurance premiums are lower when you pay once or twice a year.

Try Bundling. Bundle your auto insurance policy with another insurance policy such as a homeowners insurance policy and save money on your auto insurance premium.

Insure More Than One Car. Got more than one car to insure? Insure them both at the same company and save with a multi-car discount.

Be A Safe Driver. Be a safe and responsible driver and follow all the rules of the road and you’ll save money on your car insurance. Good drivers get good driver discounts and you’ll be rewarded with a lower car insurance premium.

Check For Discounts. In addition to good driver discounts, insurance companies offer discounts for veterans and students. So if either of these apply to you, be sure to let your auto insurance company know. You’ll save money on your car insurance.

Check For Safety Features. Having certain safety and anti-theft features on your car will lower your car insurance premium. So check with your car insurance company about the safety and anti-theft features on your car and find out if you qualify. You could save money on your premium.

Review Memberships. Some professional organizations and affiliates get discounts on auto insurance. So check the memberships in your wallet to see if you warrant a discount.

Be A Low Mileage Driver. If you are a heavy commuter, you will pay more for car insurance. But if you are a low-mileage driver you will pay less on your car insurance. So drive less, pay less on your auto insurance.

Choose A Safe Neighborhood. If you live in a neighborhood with high insurance claims and auto theft, you will pay more for your car insurance. If you live in a neighborhood with low insurance claims and low crime, you will pay less for your car insurance. So choose a safe neighborhood and save money on car insurance.

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