Car Insurance By State (2024 State Auto Insurance Guide)
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Last updated 04/04/2024 by
Benjamin LockeEdited by
Summary:
Car insurance prices fluctuate greatly across different states due to a mix of factors including local regulations, the frequency of accidents, and environmental conditions. States like Michigan and Connecticut see higher rates because of dense populations and legal requirements, while Maine and Ohio offer some of the lowest premiums, thanks to their favorable conditions and competitive insurance markets.
Car insurance prices really change depending on where you live. Things like local laws, how many accidents happen in the area, and even the weather can make your insurance cheaper or more expensive. Plus, in some places, there are more insurance companies competing for your business, which can also affect how much you end up paying.
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How does insurance cost vary by state?
The states with the highest average full coverage car insurance rates include Michigan, Connecticut, Florida, New York, and Louisiana, largely due to things like high population density, severe weather conditions, and extensive legal coverage requirements. The states with the lowest rates, such as Maine, Ohio, Vermont, Idaho, and Virginia, benefit from lower population density, milder weather, and fewer claims
States with the lowest average minimum-liability car insurance rates
| State | Average Annual Minimum-Liability Premium |
|---|---|
| Vermont | $282 per year |
| Iowa | $283 per year |
| South Dakota | $290 per year |
| Wyoming | $307 per year |
| Idaho | $328 per year |
Vermont, Iowa, South Dakota, Wyoming, and Idaho are among the states with the lowest average minimum-liability car insurance rates. Several factors contribute to these lower rates, including lower population densities, which lead to fewer accidents and claims, and generally favorable weather conditions that reduce the risk of damage from natural disasters. Additionally, these states often have competitive insurance markets and regulations that may contribute to lower insurance costs. For example, Vermont’s low insurance premiums can be attributed to its low population density and minimal traffic congestion, which significantly decrease the likelihood of accidents and insurance claims. Moreover, Vermont has a relatively low rate of uninsured drivers, reducing the risk that insurance companies have to bear and allowing them to offer lower premiums.
| State | Average Annual Minimum-Liability Premium |
|---|---|
| Michigan | $1,604 per year |
| Connecticut | $1,503 per year |
| New York | $1,472 per year |
| Florida | $1,343 per year |
| New Jersey | $1,032 per year |
On the other hand, Michigan, Connecticut, New York, Florida, and New Jersey face the highest average minimum-liability car insurance rates. These states often have higher population densities, leading to more traffic congestion and a higher likelihood of accidents, which in turn increases insurance claims and premiums. Additionally, these states may experience severe weather conditions, such as hurricanes in Florida, that increase the risk of damage to vehicles. Regulatory factors also play a significant role; for instance, Michigan’s high rates have been partly attributed to its no-fault insurance system, which requires all drivers to carry personal injury protection coverage. This system has led to higher medical costs associated with car accidents, which are passed on to consumers in the form of higher premiums.
States with the lowest full coverage car insurance rates
| State | Average Annual Full-Coverage Premium |
|---|---|
| Maine | $964 per year |
| Ohio | $1,027 per year |
| Vermont | $1,056 per year |
| Idaho | $1,069 per year |
| Virginia | $1,142 per year |
For states like Maine, Ohio, Vermont, Idaho, and Virginia, several factors contribute to their lower full-coverage car insurance rates. Maine, for instance, benefits from a combination of low population density, low crime rates, and a competitive insurance market with over 30 auto insurance carriers. This competition, along with Maine’s low rate of uninsured drivers (only 4.5%), significantly reduces the risk for insurers, allowing them to offer lower premiums. The state’s geographic location also plays a role, with fewer natural disasters and mild weather conditions contributing to fewer claims and lower insurance costs.
States with the highest full coverage car insurance rates
| State | Average Annual Full-Coverage Premium |
|---|---|
| Michigan | $3,785 per year |
| Connecticut | $2,999 per year |
| Florida | $2,947 per year |
| New York | $2,783 per year |
| Louisiana | $2,783 per year |
Michigan, Connecticut, Florida, New York, and Louisiana experience some of the highest rates for full-coverage car insurance. Michigan’s notably high rates can be attributed to its no-fault insurance law, which includes unlimited lifetime coverage for catastrophic injuries. This unique aspect of Michigan’s insurance policy leads to higher claim payouts, significantly driving up insurance costs. Additionally, Michigan has high minimum insurance requirements and a significant percentage of uninsured drivers, further exacerbating the cost of insurance. The state’s insurance rates have been historically high due to these factors, despite recent legislative efforts to address these issues.
Expert Insight
“States that mandate more coverage types and/or higher coverage limits will likely have higher auto insurance costs. Additionally, car insurance can be expensive in the 12 states where no-fault insurance is required, meaning that drivers need to have personal injury protection (PIP) to cover their own medical bills after an accident, regardless of who is at fault.” – Chong Gao, Director of Product Management R&D at Mercury Insurance
Determinants of car insurance pricing
The cost of your car insurance is influenced by several factors. Insurance companies consider the following aspects when determining the premiums for auto insurance:
What determines your car insurance pricing?
- Driving History: Individuals with infractions such as speeding tickets, accidents, DUI charges, and other violations tend to face higher insurance rates compared to those with pristine driving records.
- Credit Score: Your credit score is used by insurers as an indicator of your financial reliability.
- Age: Experienced drivers generally enjoy lower insurance rates than younger, less experienced drivers.
- Marital Status: Being married can often result in lower car insurance rates compared to being single.
- Residential Location: The cost of your car insurance is significantly influenced by your living area. Factors such as population density, claim frequency, and the prevalence of uninsured motorists in your area all play a role in determining your premiums.
- Gender: The gender indicated on your driver’s license can affect your insurance costs, with male drivers often paying more than female drivers.
- Type of Vehicle: Owning luxury or high-performance vehicles typically leads to higher insurance costs due to the higher value and repair costs associated with these types of vehicles.
Each state has a myriad of combinations of factors that are considered “allowable” as a segmentation factor for the insurance company to determine the final rate on a customer.
Common factors include age, licensing experience, driving record, loss history, and location. Unfortunately, these simple factors don’t do enough to really segment the risk pool on a meaningful level, and many additional factors are used, where allowable.
These can include credit rating, marital status, length of vehicle ownership, gender, occupation, and insurance history – many of which are packaged as “discounts” from a base rate to achieve the final rate the customer qualifies for. Lately, telematics solutions have begun to deliver data on the most granular level possible, that individual’s actual driving habits (speed, mileage driven, phone usage, acceleration, hard stops, time of day driving, actual areas driven in). Rather than using arbitrary demographic factors to determine habits, this looks at the driver’s actual habits. More and more states are allowing these programs, which is likely the most long-term solution to bringing about more standardization in rating variables across the industry.” – Ezra Peterson, Sr. Director of Insurance at Way.com
Ways to help lower your car insurance
Shop around
Prices vary significantly between companies. It’s beneficial to get at least three quotes, either online or by calling directly. Use resources like AM Best and Standard & Poor’s to check the financial health of insurance companies. Comparing different insurers can also highlight the variety of coverage options available to you.
Consider the car before buying
Insurance costs can be influenced by the car’s make and model. Cars that are cheaper to repair or have better safety records tend to have lower premiums. Additionally, some cars are more likely to be stolen than others, which can also affect insurance costs.
Increase your deductibles
Opting for higher deductibles can reduce your premiums. For instance, raising your deductible from $200 to $500 could lower your cost by 15 to 30 percent. Just make sure you can afford the higher deductible in case of a claim.
Reduce coverage on older cars
If your car is worth less than 10 times the premium, consider dropping collision and comprehensive coverage. This decision should be based on the potential payout in case of a claim versus the cost of the coverage.
Bundle policies
Buying your homeowners and auto coverage from the same insurer can lead to discounts. Also, insuring multiple vehicles with the same company can lower rates. Bundling can simplify your insurance management by having a single point of contact for multiple policies.
Maintain a good credit record
Insurers often use credit information to price policies. A good credit score can lead to lower premiums. Regularly monitoring your credit report can help you catch and correct any errors that might negatively affect your insurance costs.
Low mileage discounts
Some insurers offer discounts for driving fewer miles than the average driver or for carpooling. These discounts are based on the reduced risk of accidents due to less time spent on the road.
Group insurance
Check if your employer, or any clubs or associations you belong to, offer group insurance plans. Group insurance plans often come with lower rates due to the collective bargaining power of the group.
Other discounts
Look for discounts for being accident-free, taking defensive driving courses, or having a car with safety features like anti-theft devices. Many insurers also offer discounts for students with good grades, reflecting the correlation between responsible behavior in school and on the road.
States with specific policies or incentives to lower insurance costs. Case study: Illinois
Illinois car insurance discounts
In Illinois, drivers can access a variety of discounts to lower their car insurance costs. These discounts are categorized into policy discounts, driver discounts, and vehicle discounts. For example, Illinois drivers can benefit from the following:
Multi-policy discounts: Combining auto insurance with other insurance policies like homeowners or renters insurance can lead to savings.
Defensive driving courses: Completing approved defensive driving courses can earn drivers a discount on their premiums.
Good driver discounts: Maintaining a clean driving record without accidents or violations can lead to lower rates.
Vehicle safety features: Cars equipped with safety features such as anti-theft devices, airbags, and anti-lock brakes may qualify for discounts.
Key takeaways
- Car insurance costs vary significantly by state, influenced by factors like local laws, accident rates, and weather conditions.
- States with higher population densities and severe weather conditions, such as Michigan and Florida, tend to have higher insurance rates.
- Conversely, states like Maine and Ohio, with lower population densities and milder weather, enjoy lower car insurance premiums.
- Drivers can lower their insurance costs through various discounts for good driving records, bundling policies, and having vehicles with safety features.
FAQ
Can my employment affect my car insurance rates?
Yes, some insurance companies consider your occupation when determining your insurance rates. Certain professions may be deemed lower risk based on historical data about accidents and claims, potentially qualifying for lower premiums.
Does the color of my car influence insurance costs?
Contrary to popular belief, the color of your car does not directly affect your insurance rates. Insurers are more concerned with the make, model, age, and safety features of your vehicle rather than its color.
How does adding a teen driver to my policy affect my rates?
Adding a teen driver to your insurance policy will likely increase your premiums significantly. Teen drivers are considered high-risk due to their lack of driving experience, but discounts may be available for good grades or completing a driver’s education course.
Can parking my car in a garage lower my insurance costs?
Yes, in some cases, parking your car in a garage can lower your insurance costs. A car parked in a garage is generally considered to be at a lower risk for theft and damage from environmental factors, which can lead to lower premiums.
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