5 States Where Drivers Pay the Most for Car Insurance

5 States Where Drivers Pay the Most for Car Insurance
Photo by hedgehog94 / Shutterstock.com

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

You can slash your premium by more than half by relocating from Michigan to Maine, for example.

Those states have the highest and lowest average premiums — $2,611 and $845 per year, respectively — according to Insure.com’s latest analysis of car insurance rates, which looked at the 50 U.S. states and the District of Columbia. By comparison, the average premium nationally is $1,457 per year.

These figures are based on data from six large insurers. They assume the insured is a 40-year-old single male who commutes 12 miles 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.

According to Insure.com, the top five most outrageous locations for car insurance premiums are:

  1. Michigan
  2. Louisiana
  3. Florida
  4. Oklahoma
  5. Washington, D.C.

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 has a very unique no-fault car insurance scheme, which requires all drivers to carry Personal Injury Protection (PIP) coverage…. The majority of other states that use a PIP system put a reasonable limit on PIP coverage amounts. However, Michigan guarantees unlimited, lifetime medical benefits to auto accident victims, which dramatically increases an insurer’s risk, and your premium.”

The high cost of insurance has made it unaffordable to many in Michigan, and is one reason so many drivers there — 20.3% — are uninsured, Insure.com explains.

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

The best way to lower your car insurance premium

If moving to Maine 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 The Zebra or Gabi.

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 one 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.

Read Next

5 Reasons You Should Claim Social Security ASAP
5 Reasons You Should Claim Social Security ASAP

Experts often recommend postponing claiming your Social Security retirement benefits. But there are situations in which you should just start taking the money earlier, not later.

These 13 States Tax Social Security Income
These 13 States Tax Social Security Income

Uncle Sam is not the only one looking for a piece of your retirement income. Is your state on this list?

8 Key Steps to Planning for Retirement as a Couple
8 Key Steps to Planning for Retirement as a Couple

Ready for retirement? Not so fast. You might be surprised at some of the issues that come up for couples when they plan.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Comments