Have you recently compared your auto insurance rates with friends or relatives living in another area? You may find that prices 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. We show you the areas of the country that offer the most affordable options and explain why. Since premiums are constantly changing, we customize and update quotes each day. Although the national average is gradually increasing, you can still obtain lower rates.
There are many factors that affect the cost of your car insurance. Companies consider your age, driving record, requested coverage, zip code and county, credit rating, and the type of vehicle you own. All of these variables can have a big impact on your premium. But if you are careful behind the wheel, and maintain better than average credit, many of these factors become fairly easy to control. And as you get older, in most areas of the country, your premium tends to go down (when you hit specific age milestones such as 21, 25, 55, and 65). Drivers over the age of 75 should not consider changing carriers, unless their current policy has been cancelled or non-renewed.
Just as importantly, if your state is a "no-fault" state (such as Florida, Kentucky, Pennsylvania, Utah, Minnesota, New Jersey, or New York), Personal Injury Protection (PIP) is utilized to pay medical bills of other drivers...regardless if they were negligent. Passengers can also be included. For example, with unlimited medical benefits paid to Motor City residents, it was not surprising to see their rates so high. The Michigan Catastrophic Claim Association paid medical expenses more than $530,000 but residents paid about $200 extra (per vehicle) for that right. However, in 2021, the laws changed, and rates reduced.
New PIP coverage options are unlimited, $250,000 per person per accident, $250,000 per person per accident with exclusions, $500,000 per person per accident, $500,000 per person per accident with exclusions, and no PIP. If no selection is chosen, then unlimited coverage will be the default option. Many consumers have seen their rates reduce by as much as 20%.
Detroit area rates continue to be among the highest in the US. However, nearby Grosse Pointe, Bloomfield Hills, Novi, and Rochester Hills feature more favorable pricing. About one out of every five drivers in Michigan is uninsured. One of the reasons is the availability of seven-day policies, which are often purchased so a new car can be driven from the dealership. However, often, more permanent coverage is not subsequently purchased or policies quickly lapse after the initial payment.
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. A difference of a few miles can raise or lower the premium by as much as 25%, especially in states such as Michigan, New York and New Jersey. Depending on rating, counties that border each other, may differ in rates by as much as 20%. Naturally, high car-theft areas (generally urban instead of suburban), have more expensive prices.
For example, as previously noted, Detroit has very high pricing. However, nearby Troy and Ann Arbor have significantly lower costs. The same is true for Philadelphia, which typically has fairly high prices. Yet, West Chester, Reading, and Lancaster, just a short drive to the West, always have significantly lower rates. Crime rates are always a factor that can't be ignored, and Philadelphia and Detroit are two examples. The cost of repairing a vehicle and the percentage of uninsured drivers are also very relevant factors. Many large cities have high percentages of uncovered drivers, and prices of coverage are especially-high for young uncovered drivers.
NOTE: 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. Smaller sporty cars, although driven less, sustain more damage than other larger vehicles, and may not always be a cheap option to cover. Corvettes, of course, are one of the most costly vehicles to insure. Always popular, and generally, very well-maintained, if involved in an accident, the cost of repair will be extremely high.
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%. (We use data from the National Association Of Insurance and other sources when researching and analyzing data).
As an example, drivers in Louisiana pay an average of about $1,753 per year for car insurance, putting them near the top of the list. States with higher overall average rates include Michigan, Rhode Island, West Virginia, and Washington D.C. 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! Did previous Saints Super Bowl wins cause chaos in the streets? Definitely not!
If you reside in a state with high prices, driving a Jeep Patriot Sport, which is the cheapest car to insure in the Pelican State, will lower your premium. 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. Any time you can remove the comprehensive and collision coverage, you'll save a significant amount of money.
Maine -- The State With The Lowest Car Insurance Rates
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, $784 a year for coverage. Maine has slowly been moving up the charts in the last few years. There are very few large cities, and less than 5% of the population drives without coverage. They also have one of the oldest populations in the country which may account for less driving, and of course, fewer accidents. As more younger drivers replace their grandparents on the road, look for prices in the state to increase. Increasing the driving age will help lower rates, although this change is not expected to occur.
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. Reasons include less traffic, lower maintenance and repair costs, lower speed limits, and fewer theft and vandalism incidents. Fewer drivers are on the road at night, and during the day, roads are less congested.
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! Thankfully, they are rarely sold anymore.
According to the survey, the following are the most expensive states to insure your car:
1. Michigan -- $2,219
2. Rhode Island – $1,984
3. Louisiana – $1,753
4. Delaware – $1,645
5. Washington, D.C. – $1,621
6. Connecticut – $1,592
7. California – $1,563
8. West Virginia – $1,554
9. Florida – $1,492
10. Kentucky – $1,725
The Cheapest States
1. Maine – $784
2. North Carolina – $792
3. Ohio – $814
4. Vermont – $824
5. Idaho – $862
6. New Hampshire – $887
7. Indiana – $895
8. Virginia – $905
9. Iowa – $917
10. Utah – $931
NOTE: Ironically, in a previous article from Forbes Magazine regarding the cost of insuring your vehicles, the results were fairly similar.
Why Are Some States More Expensive Than Others?
Let's use Louisiana as an example. 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. However, tort reform will typically lower prices, if passed in your state.
Some of the states that discourage frivolous lawsuits, or at least make it more difficult and expensive to burden courts with unneeded litigation, are not surprisingly, states that typically have lower premiums. However, when serious injury is involved, especially when fatalities are present, proper adjudication should should always be followed. If you live in one of these states, your rates may be as much as 15%-25% lower than neighboring states.
Age Makes A Big Difference
Naturally, younger drivers (Ages 16-20) pay higher auto insurance rates than older drivers in all states. The combination of inexperience, and higher incidences of accidents, can sometimes double or triple the cost of coverage, when compared to someone 40-50 years older. Newly-licensed drivers also pay higher prices due to their inexperience in driving and operating a vehicle. Below, we have listed state rankings for selected ages:
Lowest Auto Insurance Rates For 25-Year-Old
Highest Auto Insurance Rates For 25-Year-Old
Lowest Auto Insurance Rates For 35-Year-Old
Highest Auto Insurance Rates For 35-Year-Old
Lowest Auto Insurance Rates For 45-Year-Old
Highest Auto Insurance Rates For 45-Year-Old
Lowest Auto Insurance Rates For 55-Year-Old
Highest Auto Insurance Rates For 55-Year-Old
Lowest Auto Insurance Rates For 65-Year-Old
Highest Auto Insurance Rates For 65-Year-Old
The Cost Of A Medical Care Clause
Michigan, which has the highest insurance costs in the nation, has a medical care clause, which allows for nearly 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 approximately 5%-20%. This personal injury feature is not popular with most informed residents of the state. A $160 per-vehicle surcharge is required to be paid to the Michigan Catastrophic Claims Association, which disperses the money back to carriers that pay more than $545,000 in crash expenses. The Wolverine State's property and casualty rates are also increasing faster than the US average, signalling that changes must be made. About 75,000 persons in Michigan are injured in accidents every year.
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. Delaying getting a license by 2-3 years provides maximum savings, although the concept is not popular among teens! Also, a large percentage of drivers are covered, and vehicle theft and vandalism rates remain low. NOTE: in most areas of Maine, the carriers offering the least expensive rates are MetLife, Geico, Patriot, MMG, State Farm, Hanover, Country Way, and Vermont Mutual.
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 help you find the companies that specialize in the lowest prices in your area. Shopping the right way may save you as much as 20%. If you change vehicles, add or subtract drivers, or move more than 30 miles away, you should always review rates in your new area.
Which Cities Have The Most Expensive Car Insurance Rates?
Each year we update our list of cities with the highest auto insurance rates. Listed below are our "Top 20."
2. New Orleans
6. New York City
8. Baton Rouge
10. Los Angeles
11. Grand Rapids
14. San Francisco
16. San Diego
20. Jersey City
Which Cities Have The Least Expensive Car Insurance Rates?
Note: Our criteria was based on cities with a minimum population of 100,000.
10. Columbia (Mo)
12. Montgomery (Al)
13. Rochester (NY)
15. Fort Wayne
18. Des Moines
19. Birmingam (Al)
20. Madison (Wi)