If you live in Louisiana you probably already know the bitter truth - your rates are likely ridiculously high! According to the national survey of drivers with car insurance in all 50 states, Louisiana was #1 with the average rate coming in at nearly $2,700 per policy, OUCH.
The harsh reality is that auto insurance isn’t usually “cheap” in any state, but clearly, in some states (about 20 of them!) auto insurance rates are actually higher than the national average of $1,510/yr! Many factors go into the cost of auto insurance for each state, including population (more drivers = more accidents), geographic location (believe it or not, some states have problems with floods, or happen to be urban jungles of chaos!) and policy holders propensity to file claims (basically this means in some states the number of expensive claims are proportionately higher than the national average, therefore costing the insurance company more money).
Feel free to browse the list on the right hand side and see where your state ranks.
In true editorial fashion to keep your reading attention we’ve trimmed the article to include only 4 states, the most expensive two and the least expensive two. However, we’d like to make one thing clear right off the bat, you could certainly be paying more or less in each state and this is not the be-all-end-all of lists, it is simply meant to be a fairly accurate guide. As a responsible driver (we hope you are!) you should always re-evaluate your auto insurance rates every 6 months to ensure you are getting the best possible coverage at the lowest possible price.
Without further ado, let’s get to the states
MOST EXPENSIVE STATES
No. 1: Louisiana
There are only 4.6m people in Louisiana. It isn’t one big dense metropolis, though it does have a recent issue with flooding, but the majority of the state is rural – so why is it the most expensive state in America to insure a vehicle? Simple. Data shows that even though there are fewer accidents in Louisiana per driver than many states, those drivers that do get in accidents tend to file larger, more expensive collision claims for damages such as Bodily Injury and of course, in the event of a flood, more comprehensive (this covers acts of god, theft, vandalism, etc.) claims as well. And of course, it wouldn’t be the true American way if residents didn’t also “Lawyer up”.
Yes, it’s true. Louisianan’s make it tough for an insurer in that state because not only are they filing claims, but they’re litigating them as well for maximum payout. And guess what? It pays to do so in LA as claims under $50,000 are decided by judges, not juries.
No. 2: Michigan
Michigan is a complex auto insurance state for one very good reason, they offer lifetime personal injury protection guarantees. Say that out loud, lifetime personal injury protection guarantees.
Where most states cap PIP (which is personal injury protection) at much smaller amounts like $10,000, $25,000 or $50,000 – Michigan throws caution to the wind. They won’t settle for anything less than forever. And guess what? That gets expensive, especially when you realize your state is subsidizing any cost over $500,000, which is what the insurer is obligated to covers before the state portion kicks in.
To understand why your rates would be so high in Michigan, let’s just do a little role playing. Let’s pretend YOU are the insurer and you’re offering policies in Florida, New York and Michigan. In Florida you have PIP maximums at $10,000. In New York you have maximums at $50,000 (that’s a little higher, now you might want to raise rates a bit to offset that cost). Wait, what? Michigan wants you to cover $500,000! That’s right. You sell auto insurance in Michigan, you MUST be able to cover the $500,000 obligation for each policy.
So what would you do? Eat the potential loss of $500,000 or pass the costs on to your policyholders? Exactly. Now, let’s put you back in the role of the policyholder and take a look at your statement – “What’s this? A bill for $175 to MCCA (Michigan Catastrophic Claims Association)!” Oh, yeahhhh, about that. See remember when the insurance company is obligated to pay up to $500,000 and the “State” covers the rest? Well, the MCCA is the state fund that covers the rest, and all Michigan policyholders pay into this as well.
In the end, it all adds up to very expensive rates any way you slice it.
LEAST EXPENSIVE STATES
No. 50: Iowa
With just a bit over 3m residents, Iowa is the 2nd lowest state for auto insurance (we count Washington D.C. as a state, that’s why you’ll see 50/51 as the two lowest) and there’s a great reason for it.
The harsh reality is that auto insurance isn’t usually “cheap” in any state, but clearly, in some states (about 20 of them!) auto insurance rates are actually higher than the national average of $1,510/yr! Many factors go into the cost of auto insurance for each state, including population (more drivers = more accidents), geographic location (believe it or not, some states have problems with floods, or happen to be urban jungles of chaos!) and policy holders propensity to file claims (basically this means in some states the number of expensive claims are proportionately higher than the national average, therefore costing the insurance company more money).
Feel free to browse the list on the right hand side and see where your state ranks.
In true editorial fashion to keep your reading attention we’ve trimmed the article to include only 4 states, the most expensive two and the least expensive two. However, we’d like to make one thing clear right off the bat, you could certainly be paying more or less in each state and this is not the be-all-end-all of lists, it is simply meant to be a fairly accurate guide. As a responsible driver (we hope you are!) you should always re-evaluate your auto insurance rates every 6 months to ensure you are getting the best possible coverage at the lowest possible price.
Without further ado, let’s get to the states
MOST EXPENSIVE STATES
No. 1: Louisiana
There are only 4.6m people in Louisiana. It isn’t one big dense metropolis, though it does have a recent issue with flooding, but the majority of the state is rural – so why is it the most expensive state in America to insure a vehicle? Simple. Data shows that even though there are fewer accidents in Louisiana per driver than many states, those drivers that do get in accidents tend to file larger, more expensive collision claims for damages such as Bodily Injury and of course, in the event of a flood, more comprehensive (this covers acts of god, theft, vandalism, etc.) claims as well. And of course, it wouldn’t be the true American way if residents didn’t also “Lawyer up”.
Yes, it’s true. Louisianan’s make it tough for an insurer in that state because not only are they filing claims, but they’re litigating them as well for maximum payout. And guess what? It pays to do so in LA as claims under $50,000 are decided by judges, not juries.
No. 2: Michigan
Michigan is a complex auto insurance state for one very good reason, they offer lifetime personal injury protection guarantees. Say that out loud, lifetime personal injury protection guarantees.
Where most states cap PIP (which is personal injury protection) at much smaller amounts like $10,000, $25,000 or $50,000 – Michigan throws caution to the wind. They won’t settle for anything less than forever. And guess what? That gets expensive, especially when you realize your state is subsidizing any cost over $500,000, which is what the insurer is obligated to covers before the state portion kicks in.
To understand why your rates would be so high in Michigan, let’s just do a little role playing. Let’s pretend YOU are the insurer and you’re offering policies in Florida, New York and Michigan. In Florida you have PIP maximums at $10,000. In New York you have maximums at $50,000 (that’s a little higher, now you might want to raise rates a bit to offset that cost). Wait, what? Michigan wants you to cover $500,000! That’s right. You sell auto insurance in Michigan, you MUST be able to cover the $500,000 obligation for each policy.
So what would you do? Eat the potential loss of $500,000 or pass the costs on to your policyholders? Exactly. Now, let’s put you back in the role of the policyholder and take a look at your statement – “What’s this? A bill for $175 to MCCA (Michigan Catastrophic Claims Association)!” Oh, yeahhhh, about that. See remember when the insurance company is obligated to pay up to $500,000 and the “State” covers the rest? Well, the MCCA is the state fund that covers the rest, and all Michigan policyholders pay into this as well.
In the end, it all adds up to very expensive rates any way you slice it.
LEAST EXPENSIVE STATES
No. 50: Iowa
With just a bit over 3m residents, Iowa is the 2nd lowest state for auto insurance (we count Washington D.C. as a state, that’s why you’ll see 50/51 as the two lowest) and there’s a great reason for it.
- It’s rural. Rural will almost always provide lower rates for the simple fact there’s less people, which means less accidents and of course – less comprehensive related crime (vandalism, theft, etc). Let’s also not forget that rural lends itself to a more relaxed atmosphere. No big city stop and go traffic, no cloverleaf ramps, impatient drivers with a 2 hour commute – nope, just easy driving.
- Even the biggest cities are smaller than the small cities in other states. With a population of just over 200k for the largest city, you can clearly see that Iowa is not “dense” by any stretch of the imagination. As mentioned in 1.), when you have big cities, you have big city problems like traffic, crime and of course, impatient drivers.
- Lower minimums and no PIP requirements. Yep. When the minimum amount of auto insurance coverage required by the state is lower, and you live in a rural state with a low population that all equals up to lower rates – especially if you’re driving an older vehicle and have a responsible driving record.
No. 51: Maine
And you thought Iowa was rural! Listen, you might be able to argue that Alaska is even more rural than Maine, but that’s only part of the equation. Remember, auto insurance rates have many, many factors and a lower population is just one. How that lower population drives is of bigger concern and of course, from the insurance companies perspective, how much it costs them to insure drivers in a specific state is a major part of it as well.
If you live in Maine, you’re in luck. You live in the cheapest state to insure a vehicle in the entire United States of America! According the state insurance division, one huge reason, aside from being rural and low in population, that rates are so low has a lot to do with teenage drivers. The restrictions set on drivers licenses (this is what’s referred to as ‘tiered licensing’) is quite strict. Drivers under a certain age aren’t allowed to drive at specific times of night, or with passengers other than family members, etc.
Add all of that up and you can easily see how a state like Maine would be a great place to insure a vehicle and if you live there, again, count yourself lucky! That doesn’t mean you’re out of the woods yet, though. In order to get the best rates on auto insurance you need to compare rates every 6 months (though, anytime is great!) in order to get the absolute lowest possible rates.
And you thought Iowa was rural! Listen, you might be able to argue that Alaska is even more rural than Maine, but that’s only part of the equation. Remember, auto insurance rates have many, many factors and a lower population is just one. How that lower population drives is of bigger concern and of course, from the insurance companies perspective, how much it costs them to insure drivers in a specific state is a major part of it as well.
If you live in Maine, you’re in luck. You live in the cheapest state to insure a vehicle in the entire United States of America! According the state insurance division, one huge reason, aside from being rural and low in population, that rates are so low has a lot to do with teenage drivers. The restrictions set on drivers licenses (this is what’s referred to as ‘tiered licensing’) is quite strict. Drivers under a certain age aren’t allowed to drive at specific times of night, or with passengers other than family members, etc.
Add all of that up and you can easily see how a state like Maine would be a great place to insure a vehicle and if you live there, again, count yourself lucky! That doesn’t mean you’re out of the woods yet, though. In order to get the best rates on auto insurance you need to compare rates every 6 months (though, anytime is great!) in order to get the absolute lowest possible rates.
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