Average Car Insurance Cost by State

If you try to compare auto insurance rates by zip code you will realize there is a dramatic difference in the average prices. The basic reason is each state uses a different set of factors to calculate the average insurance cost.

Which USA States have Lowest Car Insurance Rates?

There are some states which have the lowest car insurance rates almost half as compared to those states which have the highest auto insurance rates.

State with Lowest Auto Insurance Rates

1. Maine

Maine has an average car insurance rate of $875 per year. This is almost 50 percent less than the average national car insurance rates. The major reasons for this are a competitive market, rural area, and low uninsured drivers.

2. New Hampshire

New Hampshire has an average annual insurance rate of $886.78 which is 40 percent lesser than the national average rate. The two major reasons for the low car insurance cost are the median population density and the competitive market.

3. Idaho

The average car insurance rate in Idaho is $975.51. The state falls under a very rural area in the US with few drivers and hence lower uninsured rates. Moreover; The state has a very competitive market of more than 185 insurance agents.

4. Ohio

The average car insurance rate in Ohio is $1034 which is almost 30 percent less than the national average rate. The state has roughly more than 250 insurance agents which allow the residents to compare and get the cheapest car insurance rates.

5. Wisconsin

The average car insurance rate in Ohio is $1034 which is almost 30 percent less than the national average rate. The state has roughly more than 250 insurance agents which allow the residents to compare and get the cheapest car insurance rates.

Most Expensive USA States for Car Insurance

Factors like high population density, unique insurance systems, types of car insurance coverage, and uninsured drivers make car insurance expensive in other states.

1. Michigan

With an average of $2878 per year; Michigan is at the top of our list of highest car insurance rates by states. The major reason for this is its auto insurance system which is different from the rest of the states.

2. Louisiana

The state has an average rate of $2389 per year which is 51 percent more than the national average insurance rate. The major factor behind the high rates is underinsured and uninsured drivers.

State with Expensive Auto Insurance

3. Florida

The average cost of car insurance in Florida is $2239. The major reason for the high average cost is the population of Florida. Which consists of main tourists, students, and older generations which all fall under the category of high-risk drivers.

4. Texas

With an average car insurance cost of $2050; Texas stands at the fourth position of the list of the cities with the most expensive car insurance. The major reasons for this are; high-speed limit, a higher number of road accidents, and high population density.

5. California

The average car insurance cost in California is $1968. One of the major reasons is the higher crime rates in the city hence more cases of car stealing and vandalism. Another reason is the high population in the city which results in more accident cases.

How State-Specific Factors and Laws Affect The Car Insurance Rates

Every state and every insurance agency calculates the insurance rates based on several different factors and laws. Following are the major factors which affect the car insurance rates in every state:

Age:

Your age is directly proportional to your experience. Young drivers especially the teenage and early 20s one falls under the high-risk driver’s category. Hence; the younger the driver, the higher the insurance rates.

Coverage Level:

The higher car insurance coverage you ask for from your insurance agency the higher will be your insurance premium rate. The insurance company is taking more risk to provide extra coverage to you hence they ask for higher insurance rates.

Gender:

Most of the states follow the statistics by IIHS and believe that males are more prone to road accidents as compared to females. Different studies of IIHS shows that men get more tickets for speeding, DUI, and not wearing a seat belt as compared to males. Still, there are some states which do not allow gender to affect rates:

  • Hawaii
  • Massachusetts
  • Michigan
  • Montana
  • North Carolina
  • Pennsylvania
Driving Record:

Your driving history plays a very important role in your insurance rate calculation in every state of the USA. Your speeding tickets, road accidents, DUIs are recorded in your driving history and it impacts the final cost calculation. The timeline of the impact of every record of the ticket depends on the state for example some states check the previous 5 years of history while some check the previous 10 years.

Credit Score:

Some statistics show that customers with low credit scores more likely commit insurance fraud, file more claims, and miss the payment. But some states are now prohibiting the use of credit score as a factor for calculating insurance cost:

  • California
  • Hawaii
  • Massachusetts
  • Michigan
Tort System:

In the USA; the states are either referred to as tort states or no-fault states. A tort state is where an at-fault driver has to take care of all the medical expenses, loss of wages, and “pain and suffering” of the other driver.

No-Fault System:

Under a no-fault system, the auto insurance company of customers will have to cover certain damages. The coverage will be for a specified certain limit only.

No Pay, No Play Law:

In a No Pay No Play state, uninsured drivers can not ask for certain coverages from the at-fault drivers. But they can receive compensation for medical bills, property damage, and lost wages. Most of the states have adopted the No Pay No Play Law and others are also considering adopting it.

How Does Where You Live to Affect Your Car Insurance?

When you compare auto insurance rates by zip code you will realize there is a major difference in the rates. Whenever you provide your ZIP code to the company they immediately check the crime rate in that area. The rate of stolen car cases, amount of claims, the harshness of the weather, and the cases of vandalism. And all these factors decide the quote of car insurance by state. If an area has a high crime rate and harsh weather then it will increase the risk hence high rates.

Average Cost of Car Insurance by State

In the USA, every state has specific laws when it comes to auto insurance. Hence, the cost of car insurance varies a lot for every state. For example, the insurance system and laws are unique in Michigan, The state follows no-fault laws and unlimited personal injury protection, which leads to high rates. As a result, your ZIP code and different other factors determine minimum liability coverage and full coverage policy for you.

State Car Insurance FAQs

Q

Can I swap my car insurance if I change my car in the USA?

A

Yes, it is possible to swap your car insurance from your old car to the new car. Your insurance policy will need some small amendments. All you have to do is inform your insurance provider and they will initiate the process on your behalf.

Q

Do I have to change my car insurance when I move states?

A

If your current insurance provider serves insurance cover in the state where you are moving then there won’t be an issue. But if your provider does not have any coverage in that city, state, or zone then you might have to change the provider. First thing is to discuss with your present provider about your moving decision and they’ll provide you a better solution.

Q

Does changing car insurance agencies affect credit score?

A

Insurance companies just need your credit score before providing you a quote. But changing your insurance comes under “soft pull” and that doesn’t affect your credit score.

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