Which States Have The Cheapest Car Insurance Rates?

Have you recently compared your car insurance premium with friends or relatives living in another area? You may find that rates in other states may be quite a bit higher than the price you currently pay. But they also may be lower. There's a big variance from the cheapest state to the most expensive state.

There are many factors that affect the price you pay for car insurance. Insurers look at your age, credit rating, driving record and the type of vehicle you own. All of these can have a big impact on your insurance premium. But if you are careful behind the wheel, and maintain better than average credit, many of these factors become fairly easy to control. 

Where Do You Live?

Another factor that carriers take into account that is not as easy to control is where you live. Most people will not move to another state in order to lower their car insurance premium. But the state where you currently reside has a huge impact on your rates. Also, your zip code and county will also affect the cost.

Safe vehicles tend to be more pocketbook-friendly. We published a list of the safest vehicles and as expected, their insurance rates tend to be lower than most others. There are exceptions, especially, the high-performance and very large SUV options.

A recent study by a major insurance website compared the costs of car insurance among the 50 states and the differences in premiums can be a bit shocking. In some instances, the difference is more than 100%.

Best Car Insurance Rates

Maine and Iowa Have Very Low Rates

As an example, drivers in Louisiana pay an average of $2,699 per year for car insurance, putting them at the top of the list. Louisiana drivers should be used to sky-high prices though, as they are consistently in the top of the rankings each year. Is everybody in Louisiana a bad driver? Certainly not. Is Mardi Gras celebrated all year? We hope not!

If you happen to live in the state of Louisiana, one way you can lower your premiums is to drive a Jeep Patriot Sport which is the cheapest car to insure in the Pelican State. If you decide to forgo the Jeep and get a Mercedes S65S AMG you will be paying the highest rates possible. As you might expect, most luxury and/or sports cars are going to cost the most.

Maine Leads The Way

Motorists in Maine, however, enjoy the lowest rates in the country according to the study. Residents of the Pine Tree State only pay, on average, $934 a year for coverage. Maine has slowly been moving up the charts in the last few years. They also have one of the oldest populations in the country which may account for less driving, and of course, fewer accidents.

These rates only reflect the average in each state. Residents of large cities, such as New Orleans, Philadelphia or Houston will pay higher rates than drivers living in smaller cities. And often, small rural areas have the lowest available rates.

Luxury car drivers will pay a hefty premium for their fancy car, even if they are in a low cost state. Cruising a Mercedes-Benz CL65 AMG coupe in Oregon will cost about $5,687 per year, which is the highest car insurance premium in the country. A much cheaper choice would be driving a Toyota Tacoma in the state of Wyoming, which will only cost $698 a year. And if Yugos were still available, the price would be lower!

According to the survey, the following are the most expensive states to insure a car in 2013:

1. Louisiana -- $2,699

2. Michigan – $2,520

3. Georgia – $2,155

4. Oklahoma – $2,074

5. Washington, D.C. – $2,006

6. Montana – $1,914

7. California – $1,819

8. West Virginia – $1,816

9. Rhode Island – $1,735

10. Kentucky – $1,725

The Cheapest States:

42. Arizona – $1,227

43. Washington – $1,226

44. Indiana – $1,183

45. Vermont – $1,176

46. Idaho – $1,133

47. New Hampshire – $1,112

48. Ohio – $1,106

48. North Carolina – $1,085

50. Iowa – $1,028

51. Maine – $934

Why are some states more expensive than others?

List Of Cheap States To Drive

Lower Speed Limits Lead To Fewer Accidents

There are a few factors involved but one of the major reasons is that the majority of Louisiana drivers who are in an accident file a bodily injury claim. Louisiana law also allows lawsuits for less than $50,000 to be decided by a judge instead of a jury and these judges often side with consumers over insurance companies, which can lead to higher premiums. As you might expect, the easier it is to sue, the more likely your state will have higher prices.

The Cost Of A Medical Care Clause

Michigan, which has the second highest insurance costs in the nation, has a medical care clause, which allows for unlimited lifetime personal injury coverage for drivers involved in a car crash. This adds a significant amount to every policy written in the state. If a cap were placed on judgements, the cost of coverage would reduce by anywhere from 5%-20%.

Maine, one of the cheapest states to insure a car, benefits from a large rural population which tends to file fewer claims. Instituting a graduated licensing program has also reduced crashes among teen drivers. Typically, states that make it harder for teenagers to get a license, enjoy lower premiums. Delaying the age by just 6-12 months can make a big difference.

While most folks are not going to pack up a moving truck to chase a lower car insurance premium, knowing where your hometown falls in the survey results will make you aware of what to expect the next time your premium comes due. We will help you find the companies that specialize in the lowest prices in your area.