Auto Insurance Rates By State

Most Expensive and Least Expensive Car Insurance Rates in the United States

When it comes to car insurance, the cost can vary significantly from state to state. In 2022, annual car insurance premiums ranged from as high as $3,292 in Michigan to as low as $1,047 in Ohio, with the United States average sitting at $1,647.

The top five most expensive states for car insurance were Michigan ($3,292), Louisiana ($2,786), Florida ($2,733), Nevada ($2,522), and New York ($2,459). On the other hand, the five least expensive states were Ohio ($1,047), Idaho ($1,088), Maine ($1,111), Vermont ($1,150), and Indiana ($1,269).

It's interesting to note that there's a substantial difference between the highest and lowest averages. For instance, car owners in Michigan pay around three times more for their insurance than those in Ohio.

These figures underline the importance of shopping around for the best car insurance rates. You might also want to consider how factors such as your driving record, age, vehicle make and model, and even your credit score can influence your insurance premiums.

While cost is an important factor, it shouldn't be the only consideration when choosing an insurance provider. Always consider the coverage options, customer service, and claim process too.

"The cost of car insurance is influenced by many factors, including where you live," says BestPlaces founder Bert Sperling. "But regardless of the cost, it's crucial to have sufficient coverage to protect yourself financially in case of an accident."

Stay informed, compare quotes, and choose wisely. Your wallet and peace of mind will thank you.

Let's take a look at the states that fall in the middle range of the annual car insurance premiums for 2022. These states are around the national average of $1,647 per year.

• Massachusetts ($1,721): Slightly above the national average, Massachusetts is known for its rich history and higher cost of living, which may factor into its car insurance rates.
• Montana ($1,647): Montana's car insurance rates sit right at the national average. Despite its rural nature, Montana has high accident rates due to challenging driving conditions, particularly in winter, potentially affecting its insurance costs.
• Pennsylvania ($1,621): Pennsylvania's rates are just below the national average. The state has a mix of urban and rural areas, leading to a balance of risk factors for auto insurers.
• Mississippi ($1,608): Mississippi's rates are also below the national average. This southern state has a largely rural population, which can contribute to lower insurance costs due to fewer accidents and thefts.
• New Mexico ($1,587): New Mexico falls well within the middle range of car insurance rates. It offers a mix of urban and rural areas, with varying levels of traffic congestion and accident rates.

Factors that Determine Insurance Rates

When it comes to car insurance, several factors can influence the cost of your premium. Understanding these can help you make informed decisions and possibly save money. Here are some of the key factors:

1. Location: Your place of residence significantly impacts your car insurance rates. As mentioned earlier, states like Michigan and Louisiana have the highest average premiums, while Ohio and Idaho are among the least expensive. This variance is due to differences in state laws, theft rates, and accident statistics.
2. Age: Younger drivers often face higher premiums because they are considered high-risk due to their lack of driving experience. Conversely, older drivers usually enjoy lower rates as they are deemed more responsible.
3. Driving Record: If you have a history of accidents or traffic violations, insurers will likely charge you more for coverage. A clean driving record, on the other hand, can lead to discounts on your premium.
4. Vehicle Make and Model: The type of car you drive matters. Luxury vehicles and sports cars usually cost more to insure because they're more expensive to repair or replace. Cars with safety features may be cheaper to insure.
5. Credit Score: Many insurers use credit-based insurance scores to predict how likely you are to file a claim. A higher score could mean lower premiums.
6. Coverage and Deductibles: The more coverage you buy, the more it can cost. Additionally, if you choose a lower deductible, your premium will be higher.
7. Miles Driven: If you drive a lot, you'll likely pay more for insurance because you're at a greater risk of getting into an accident.

Bert Sperling notes, "Understanding the factors that impact your car insurance rates can help you better navigate the process and potentially find ways to save. It's about balancing adequate coverage with a premium you can afford."

Remember, car insurance is not just a legal requirement; it's a crucial financial safety net. It's important to understand these factors and discuss them with your insurance provider to ensure you're getting the best possible coverage for your needs.

Lowering Your Premiums

Minimizing auto insurance rates can be achieved by implementing various strategies. Here are some of the most effective methods:

1. Shop Around: Different insurance providers may offer different rates for the same coverage. It's advisable to compare quotes from multiple companies to ensure you're getting the best deal.
2. Maintain a Clean Driving Record: A history of accidents or traffic violations can increase your car insurance costs. By driving safely and responsibly, you can maintain a clean record and potentially lower your premiums.
3. Increase Your Deductible: Choosing a higher deductible can decrease your premiums. However, it's important to ensure you can afford the deductible in case of an accident.
4. Bundle Insurance Policies: Many insurers offer discounts if you bundle multiple policies, such as auto and homeowners insurance, with the same company.
5. Take Advantage of Discounts: Insurance companies often offer various discounts, such as those for safe drivers, students with good grades, or vehicles equipped with safety features5. Check with your insurer about any discounts you may qualify for.
6. Reduce Coverage on Older Cars: If your car is older, you might consider dropping collision or comprehensive coverage, which can lower your premium6. However, do this only if the cost of insuring the car exceeds its value.
7. Take a Defensive Driving Course: Some insurance companies offer discounts to drivers who complete approved defensive driving courses.
8. Maintain a Good Credit Score: Insurers often use credit scores to help determine premiums. A higher credit score may lead to lower insurance costs.

While finding a lower rate is important, it's also crucial to ensure you have enough coverage to protect yourself financially in case of an accident. Always discuss your options with a trusted insurance professional to make sure you're making the best decision for your situation.

History of Auto Insurance

Car insurance, as we understand it today, has a rich history that dates back to the end of the 19th century. The Travelers Companies, an American insurance company, wrote the first auto insurance policy. This policy was sold in either 1897 or 1898.

The very first recipient of an auto insurance policy was a doctor named Truman J. Martin of Buffalo, New York. This policy marked the beginning of a new era in insurance and paved the way for the multi-faceted insurance policies we have today.

In 1912, insurance companies began to evolve their offerings by combining property, liability, and fire coverage. This development marked the inception of multi-line auto insurance plans, a precursor to the comprehensive insurance plans we are familiar with today.

The Road Traffic Act of 1930 in the United Kingdom made it the first country to introduce compulsory car insurance. This Act mandated that all vehicle owners and drivers must be insured, setting a precedent that would be followed by many countries around the world in the years to come.

In the early 1990s, the landscape of car insurance continued to change with the founding of Direct Auto Insurance by William Adair. He envisioned a premier, non-standard automobile insurance company that would serve its customers diligently.

Today, car insurance has become a critical aspect of owning and operating a vehicle. It protects drivers from financial loss due to accidents and provides peace of mind on the roads. The industry continues to evolve with advancements in technology and changes in society, making car insurance an ever-relevant topic.

As Bert Sperling notes, "Understanding the history of car insurance can help us appreciate its importance in our lives today. It's a vital safety net that protects us financially and legally while on the road."

Industry Leaders

The American car insurance industry is dominated by a number of key players that provide a wide range of services. These companies are recognized for their market share, customer service, and comprehensive coverage options. Here are some of the leaders in the American car insurance industry:

1. State Farm: State Farm is the largest car insurance provider in the US, accounting for almost 17% of the overall market. Known for its strong customer service and comprehensive coverage options, State Farm has established itself as a reliable choice for many drivers.
2. Progressive: Progressive is another major player in the car insurance industry. They offer competitive rates and a variety of discounts, making them a popular choice for cost-conscious drivers.
3. Geico: Geico is renowned for its extensive marketing campaigns and competitive pricing. They offer a variety of insurance products, making them a convenient one-stop-shop for many customers.
4. Allstate: Allstate offers a range of insurance products, including auto, home, and life insurance. They're known for their personalized service and a wide array of discount opportunities.
5. USAA: While USAA is only available to military members and their families, they're highly praised for their exceptional customer service and comprehensive coverage options.
6. Liberty Mutual: Liberty Mutual is another large insurer offering a wide range of insurance products. They're known for their customizable policies and competitive rates.
7. Farmers: Farmers Insurance offers a variety of coverage options and is known for its excellent customer service. They also offer a range of discounts, especially for safe drivers.
8. Travelers: Travelers is one of the oldest insurance companies in the US and is recognized for its comprehensive coverage options and strong customer service.

These companies lead the industry due to their ability to provide reliable coverage, excellent customer service, and competitive pricing. Each of these companies has a unique approach to car insurance, offering various coverage options, discounts, and benefits to meet the diverse needs of American drivers.

About BestPlaces

Founded by author Bert Sperling over 30 years ago, BestPlaces helps Americans find their own best place to live. The site allows millions of monthly users to compare and track the cost of living between different locations by providing data on groceries, housing costs, transportation, and other expenses.