Believe it or not, the area in which you live can have an effect on your car insurance rates. While individual factors such as your age and your driving record also play a role, your state and ZIP code can often set the stage for how much you can expect to pay each month.
To that end, we’ve laid out the average car insurance rates by state below. Read them over so that you have an idea of the typical costs on your state.
Car insurance rates by state
|State||Average Car Insurance Rate|
The most expensive states for car insurance
Michigan’s car insurance rates are the highest in the nation. In fact, their average rate of $2,484, is nearly double the national average for car insurance of $1,355, coming in at a startling $1,129 more. The reason for this higher-than-normal premium is because the state requires drivers to have no-fault car insurance. This type of insurance allows drivers to recover financial losses from their own insurance company regardless of who is at fault in an accident. Drivers are also required to have unique personal injury protection coverage. Unlike other states, these policies do not have a limit to the amount of personal injury expenses that will be covered.
Steep car insurance rates in Louisiana can be attributed to the high number of drivers that drive without insurance or with the minimum amount of coverage allowed by law. An estimated 40% of Louisiana drivers carry the minimum allowable coverage while another 15% drive totally uninsured. When these drivers get into accidents, they’re forced to turn to expensive court proceedings in order to cover their incurred costs.
High numbers of uninsured drivers are also a factor behind Florida’s high insurance rates. According to Autolist, approximately 26.7% percent of all drivers in the Sunshine State are currently uninsured. Other factors include a larger-than-usual population of high-risk drivers and frequent rainy weather, which increases the probability of accidents.
The cheapest states for car insurance
In contrast to the states listed above, Maine has very low rates of uninsured drivers. Money.com puts the figure at around 4.7%. Since Maine does not have many big cities, the roads tend to be less congested, which means there is less probability of accidents.
U.S. News and World Report states that Idaho’s low insurance rates can be contributed to having a majority of experienced drivers behind the wheel. According to their research, citizens aged 65 and above make up the largest percentage of the state’s drivers. Additionally, Boise – the state’s largest city – is in the top 10 in the nation for the shortest commute time. Less time behind the wheel means fewer accidents.
Ohio’s low costs for auto insurance can be attributed to having a lower number of drivers on the roads, a lower costs for repairs when accidents do occur and a relatively low number of weather-related accidents.
How where you live affects your car insurance rate
There’s no getting around the fact that where you live can impact your car insurance rates. On a state level, required insurance minimums can have an effect, as well as other factors beyond your control such as weather patterns. As we saw above, those with higher insurance requirements and inclement weather patterns tend to pay more.
On a city level, factors like the number of drivers on the road or the average commute time can play a role. Less congested areas and areas with shorter commute times tend to have lower rates, on average. Car insurance by state also varies on the ZIP code level, taking into consideration the prevalence of vehicle theft and other crime rates where you live compared to the rest of the state.
Other factors considered in your car insurance rate
Of course, the area where you live isn’t the only factor that goes into determining your car insurance rate. Other factors include your age, your gender, your credit score and your driving record. However, keep in mind that each car insurance company weighs these factors differently when they give you your rate. Your best chance at finding affordable car insurance is to shop around.
Frequently asked questions
What is a no-fault state?
In a no-fault state, your insurance is required to pay for all or some of the medical costs resulting from an accident regardless of who was at fault in the accident. In this case, claims are made through required personal injury protection (PIP) coverage.
What is a tort state?
A torte state is the opposite of a no-fault state. In a torte state, one driver must be found at fault for the crash and then that driver’s insurance is responsible for paying the other driver’s medical costs.
Is car insurance required in my state?
Probably. Virginia and New Hampshire are the only two states that do not require auto insurance.
Is ZIP code-based insurance legal?
In most areas, ZIP code-based insurance is legal. However, California has a law that prohibits insurance companies from using ZIP codes as the main factor in determining premiums.