These 5 States Have the Most Outrageous Car Insurance Rates

Auto insurance will cost you up to 140 percent more in one state. Here's the easiest way to lower your rates no matter where you live.

These 5 States Have the Most Outrageous Car Insurance Rates Photo by pathdoc / Shutterstock.com

Here’s an unusual way to cut your car insurance rates: Move.

You can slash your premium in half just by moving from Michigan to Vermont, for example.

Those states have the highest and lowest average premiums — $2,239 and $932 per year, respectively — according to Insure.com’s latest analysis of car insurance rates.

By comparison, the average premium nationally is $1,365 per year. So, Michigan’s rate is 64 percent higher than the national average — and 140 percent higher than Vermont’s rate.

These figures are based on data from six large insurers. They assume the insured is a 40-year-old single male who commutes to work, has a clean driving record and has good credit. This hypothetical man’s car insurance policy includes:

  • Limits of $100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident
  • A $500 deductible on collision and comprehensive coverage
  • Uninsured motorist coverage

The top five most outrageous states for car insurance are:

  1. Michigan
  2. Louisiana
  3. Florida
  4. Rhode Island
  5. Connecticut

Why car insurance premiums vary by state

Several aspects of your location can impact your car insurance rates. Insure.com reports that these factors include:

  • State laws
  • Weather
  • Uninsured drivers
  • Crime, crash and claim rates

In Michigan — which Insure.com has ranked as the most expensive state for car insurance for six consecutive years now — high rates are primarily due to state laws governing personal injury protection PIP). PIP covers medical expenses of the insured and the insured’s passengers if they are injured in an auto accident.

Michigan requires all drivers to carry PIP coverage. As Insure.com notes:

“Michigan employs a unique no-fault car insurance system … Most other no-fault states put a limit on the PIP amount, but Michigan guarantees unlimited lifetime medical benefits to auto accident victims, which dramatically increases an insurer’s risk.”

Due to what Insure.com describes as “outrageous car insurance premiums,” Michigan also has a relatively large share of uninsured drivers — 20.3 percent. That’s the fourth-highest rate in the nation.

A high percentage of uninsured motorists pushes car insurance rates up because it means there are fewer insured drivers to offset risk for insurers. Conversely, a low percentage of uninsured motorists helps lower rates.

Vermont happens to have the third-lowest uninsured motorist rate in the nation at 6.8 percent. Other factors contributing to Vermont’s ultra-low average premium include a sparse population and lack of severe weather like tornadoes and hurricanes.

The best way to lower your car insurance premium

If a move to Vermont sounds a bit too “chilly” for you, fear not: There are more practical ways to slash your car insurance rates. Chief among them is shopping around.

You can do this yourself or sit back and let someone else do it for you.

If you prefer the easy route, check out a comparison site like Gabi.com.

Money Talks News founder Stacy Johnson recently tried it and saved $546. He writes:

“Gabi is a San Francisco-based car insurance broker licensed in every state. As with other online services offering car insurance, Gabi represents a bunch of major insurance companies. Unlike other services, however, Gabi requires much less information from you, and no salesman will call. Best of all, unlike other insurance search engines I’ve tried, this one actually saved me serious money.”

If you prefer shopping around the old-fashioned way, check out “The Complete Guide to Getting the Best Possible Deal on Car Insurance.” It will help you determine what to look for in a policy so you can find the best policy for you at the best price.

What’s your best tip for saving money on auto insurance? Share it by commenting below or on Facebook.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Karla Bowsher
Karla Bowsher
I’m a freelance journalist and former newspaper reporter who has covered both personal and public finance. I've worked for a top 50 major metro daily and a community newspaper as well as ... More

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