Your driving history, age, and vehicle play a large part in determining what you pay for car insurance. However, there is one more variable that greatly affects it perhaps more than any other, and that variable is where you live. Car insurance rates by state are often different by hundreds, if not thousands of dollars.
Each zip code represents a different level of risk to both the driver and the insurer. Whether it’s because of accidents, thefts, or vandalisms, certain areas are simply more dangerous than others, which is why there are such discrepancies between some states.
Because of all of this, we’ve laid out the average rates for car insurance by state below. Read them over so that you have an idea of the typical costs you can expect for each area.
Auto insurance rates by state
When you buy car insurance, you need to know what your state’s requirements are. Insurance companies won’t let you purchase less than your state’s minimum liability, but it’s a good idea to know what your state expects of you. For many states, minimum liability isn’t enough should you get into a serious accident. When medical costs exceed what you’re covered for, you’ll have to pay any remaining amount out of pocket.
Here are the average car insurance rates by state so you can get an idea of how much you might pay.
|State||Coverage||Average Car Insurance Rate|
When you look at the average auto insurance rates by state, remember that your price will vary based on factors like your age, driving history, location, vehicle and discounts you are eligible for. Don’t be surprised if you pay more or less than the average price. Instead, use these to get an idea of how much is reasonable.
The most expensive states for car insurance
Michigan’s car insurance rates are currently the highest in the nation. The national average is $1,716, making Michigan $1,750 more. Why is it so expensive? Michigan requires drivers to have no-fault car insurance, which allows drivers to recover financial losses from their own insurance company regardless of who is at fault in an accident. Additionally, drivers are also required to have personal injury protection (PIP) coverage.
Steep car insurance rates in any state can often be attributed to the amount of uninsured drivers or the amount of drivers with only minimum liability. An estimated 40 percent of Louisiana drivers carry the minimum allowable coverage while another 13 percent drive totally uninsured. When these drivers get into accidents, they’re forced to turn to expensive court proceedings to cover their incurred costs
Nevada is the third highest state for auto insurance with an annual average premium of $2,486. The reasons for this is tricky to answer. Yes, in Las Vegas there is a higher amount of accidents and theft, but it’s just one city. However, 75 percent of Nevada’s population lives in Clark County— that’s a lot of people in one area. Another reason Nevada has high premiums is because it has frequent sandstorms that damage cars and severely reduce driver visibility.
The cheapest states for car insurance
With an average annual premium of only $1,062, Maine is currently the cheapest state for auto insurance and also has the lowest percentage of uninsured drivers. The Insurance Information Institute in its latest study found that only 4.5 percent of drivers are uninsured. As a general rule of thumb, it’s less congested than other states, making it a safer place drive.
New Hampshire was just narrowly beat by Maine for lowest premiums. As of now, the average premium is only $1,070. Like Maine, it’s typically less congested than other states, making traveling an overall safer experience.
Virginia’s average premium is $1,194, making it the third cheapest state to drive in. Though Virginia has its share of urban areas, they aren’t as big or congested as other cities in the U.S.– plus, much of Virginia is still rural farmland. Compared to other states, it also has a low uninsured motorist percentage. At 9.9 percent, it’s currently the 34th state for uninsured motorists.
How where you live affects your car insurance rate
Where you live grealy impacts your insurance rates. At the state level, insurance minimums and weather patterns affect what you pay. States with higher liability requirements and instances of inclement weather pattern claims typically pay more for car insurance.
For urban areas, factors like the average number of drivers on the road and the average commute time play a role too. The longer you drive each day and the more people that are on the road with you, the more opportunities there are for accidents. Because of this, less congested areas and areas with shorter commute times often have lower rates.
Car insurance by state also varies with the ZIP code, taking into consideration the prevalence of vehicle theft and other crime rates where the insured lives compared to the rest of the state.
Other factors considered in your car insurance rate
Where you live isn’t the only factor that goes into determining your auto insurance rates. Other factors include your:
- Credit score
- Driving record
- Marital status
- Car’s make and model
- State’s liability requirements
- Yearly mileage
Frequently asked questions
What is a no-fault state?
A no-fault state is a state where if there is an accident, insurance providers are only responsible for paying for the insured’s medical care. This means each driver must purchase personal injury protection (PIP) with their auto insurance.
What is a tort state?
A tort state is the opposite of a no-fault state. In a tort state, only the driver who is considered at-fault is responsible for paying for medical coverage. This means in each accident, someone must always be found to be the cause of the accident.
Is car insurance required in my state?
Most states require that you have some form of car insurance. Though some states don’t technically require it, every state requires you have enough in assets to cover the minimum liability requirements.
Most people aren’t willing to give up their house over a car accident and choose instead to purchase car insurance.
Is ZIP code-based insurance legal?
Yes, and when you think about it, it makes sense. If an insurance company knows that it is likely you will file a claim in the near future, that means you represent a higher degree of risk for it.
However, California has a law that prohibits insurance companies from using ZIP codes as the main factor in determining premiums. They may still use it as a factor, but it can’t be the one that carries the most weight.