When it comes to car insurance, where you live is a factor in what you'll pay. Here's a list of the most expensive, and cheapest, cities to insure a car. Plus, how to lower your bill wherever you live.
Rather than Motor City, maybe we should call Detroit Insurance City. Average cost to insure your car there last year: $5,948, the highest in the country.
That’s 56 percent higher than the next highest, and more than seven times the cost of full coverage insurance in the lowest-cost city in the country, at least according to the Insurance Information Institute.
Fortunately, while rates vary wildly from city to city, the ways to save are pretty much the same everywhere. In the video below, Money Talks News founder Stacy Johnson discusses a few. Check it out, then read on for more…
The video above mentions some of the cheapest and most expensive cities for insurance. Here’s the top five of each, from the Insurance Information Institute…
|Rank||Most expensive||Annual average||Rank||Least expensive||Annual average|
|1||Detroit, Mich.||$5,948||1||Wapakoneta, Ohio||$865|
|2||New Orleans, La.||$3,802||2||Fairfield, Ohio||$951|
|3||Philadelphia, Penn.||$3,496||3||Portland, Maine||$953|
|4||Baltimore, Md.||$3,168||4||Roanoke, Va.||$963|
|5||Miami, Fla.||$2,959||5||Lafayette, Ind.||$982|
Ways to save
Besides moving to Wapakoneta, here’s what you can do to keep your rates down:
- Raise your deductible. Offering to pay more out of pocket is a quick way to lower your rate, but don’t make it more than you can afford. According to the III, going from a $250 deductible to $500 can save 30 percent, and up to $1,000 can save more than 40 percent.
- Ask about discounts. Although they vary by insurer, common discounts include having anti-theft and safety devices, other policies with the company, low mileage, no accidents for a few years, or an out-of-state student on the policy. Being a long-time customer, taking driving courses, or setting up online auto-pay also sometimes helps. Call your company and ask about these and any other ways to save.
- Comparison shop. Rates vary from insurer to insurer just like they do from state to state, so get quotes from several. Start with our insurance search tool. Check smaller companies too, but make sure they’re licensed to do business in your state by contacting your state’s insurance department, which should have a list of authorized providers. To gauge the financial strength of an insurance company, you can check their ratings at Standard & Poor’s or A.M. Best.
- Lower coverage for older cars. There’s a rule of thumb suggesting that if the annual cost of comprehensive and collision coverage exceeds 10 percent of your car’s value, you might consider dropping this portion of your policy and become self-insured.
- Keep your credit clean. Fair or not, many insurance companies have come to the conclusion that people who wreck their credit are more likely to wreck their cars. Result? Higher rates for lower credit scores. Make yours sparkle. Check out 3 Tips to Raise Your Credit Score Fast and 3 Steps to Improve Your Credit History.
- Drive cars that cost less to insure. Don’t ever buy a car without first checking the insurance rates on it: Some cars cost more to insure than others. Insure.com has a tool that tracks average premiums for different cars.
- Try new programs. Some insurers are experimenting with tools that track your driving habits and set your rates accordingly. So if you drive fewer miles – or, in some cases, with a lighter foot – you might pay less. It’s called a “pay-as-you-drive” policy.
For example, if the comprehensive and collision coverage portion of your policy costs $300 per year, you might consider dropping this coverage if your car is worth less than $3,000. (You can get an estimate of your car’s value from Kelley Blue Book.) But keep in mind, if you have an accident that’s your fault, you’ll be on the hook for the full value of your car. Also remember that if you no longer have full coverage on your personal car at home, you may not on one you rent away from home either.
IMPORTANT: NEVER drop liability coverage, and make sure you have enough to cover your entire net worth. Liability insurance is no place to scrimp!