Cars and Trucks

Highest Car Insurance Rates by City

Knowing the highest car insurance rates by city can help you shop for an affordable insurance provider and reduce your vehicle ownership costs. It can also help you select states that offer pocket-friendly insurance rates as the cost of insuring vehicles can add up quickly, especially if you drive an expensive car.

Which States Have the Cheapest Car Insurance Rate?

The following states have the lowest car insurance rates in the United States:

Maine

Since 2019, Maine has maintained the spot for the least expensive state in the United States. The state fell to the rank of the cheapest five states in the U.S. in 2009. Save for 2018, when Maine moved to the 13th most affordable spot, it has never risen above the 5th position. The average insurance premium in the state is $912, which is 40 percent cheaper than the average insurance rate in the U.S., according to carinsurance.com

New Hampshire

New Hampshire ranks second for the states with the cheapest car insurance. The Granite State has an average annual insurance rate of $985, about 35 percent lower than the U.S. average insurance rate.

In terms of car insurance, New Hampshire does not conform to the norm. The state allows its residents to own a car without purchasing insurance. According to insure.com, the state mandates all drivers to show proof that they can afford to cover any financial responsibility that may arise from driving, which is essentially self-insurance. Drivers who cannot provide proof of sufficient funds to cover payment for damages arising from an auto accident might lose their license.

Ohio

While Ohio used to be the 10th cheapest state in the U.S., it has now risen to the third spot. Presently, the average car insurance rate for Ohio is $1034, a whopping 30 percent below the national average. Thanks to the 250 insurance companies in Ohio, residents have various affordable insurance options.

Wisconsin

A list from insure.com ranks Wisconsin as the fourth cheapest state for car insurance rates. In 2020, Wisconsin’s average insurance premium was $1049, about 31 percent cheaper than the median car insurance rate in the U.S.

Despite the flooding that frequently occurs in Wisconsin, car insurance is quite affordable in the Badger state. That said, if you want your vehicle insurance to cover flood damage on your car, you must purchase comprehensive car insurance. Otherwise, you may have to pay for the repair costs on your own.

Idaho

With an average insurance rate of $1062, Idaho is the fifth cheapest state to buy car insurance. One reason why car insurance in Idaho is so cheap is the low population of residents. According to insure.com, there are only about 20 people living in each square mile of the state. Even though the state is in the countryside, most drivers use car insurance. Only 8 percent of Idaho drivers use cars without insuring them.

Compared to the population of the citizens, there are many insurance companies in the state. Research shows that Idaho has over 185 insurance companies, all offering affordable rates. All these factors account for the low insurance prices in Idaho.

Which States Have the Most Expensive Car Insurance Rates?

Here are the states that have the most expensive car insurance rates:

Michigan

Since 2013, Michigan has maintained the top spot as the most expensive state for car insurance. A report from Insure.com states that the average car insurance rate per year in Michigan is $2878. This amount is 90 percent higher than the median vehicle insurance premium in the U.S., which is only about $1517.

Vehicle insurance rates in Michigan skyrocketed after the state created a unique auto insurance system. The unique auto-insurance system was based on a no-fault law that mandated every driver in Michigan to carry a Personal Injury Protection (PIP) coverage. When an accident occurs with a PIP-insured vehicle, the insurance company covers the medical bills of the driver and other injured victims.

Apart from Michigan, some other states in the U.S. also encourage their drivers to purchase the PIP coverage. However, the PIP coverage in these other states is limited, unlike in Michigan. Until 2020, the Personal Injury Protection coverage that insurance companies in Michigan offered guaranteed lifetime medical insurance. This unique feature transfers most of the risk to the insurance company.

To bear this risk, insurers in Michigan increased the vehicle insurance premium. This is why vehicle insurance is so expensive in Michigan. Thanks to reform laws that the state passed in July 2020, insurance premium costs in Michigan may reduce in the coming years.

Louisiana

Insure.com ranks Louisiana as the second most expensive state for car insurance rates. The Pelican state’s average car insurance premium is $2389.

Expensive lawsuits between uninsured and underinsured drivers are the main reason for expensive vehicle insurance rates in Louisiana. Whenever an accident happens, these drivers must go to court, where an elected judge often requests that insurers pay large settlements to accident victims. Most insurance companies in Louisiana pass these expenses to insured drivers in the form of increased car insurance rates.

In addition, many of the drivers in Louisiana are uninsured or underinsured. A report from IRC revealed that 13 percent of the state’s drivers have no car insurance. Even among insured drivers, 40 percent only purchase minimum coverage for their vehicles.

Florida

Florida takes third place in the list of states with the most expensive car insurance. In this state, the average car insurance rate is $2239, about 48 percent higher than the U.S. average premium.

The large amount of uninsured drivers in Florida is one reason why car insurance rates are so expensive. An IRC study reports that Florida has the largest number of uninsured drivers in the United States. 26.7 percent of drivers in the state are uninsured. As a result, insurance companies increase car insurance costs to make up for the relatively low rate of insured drivers.

Check this out if you need additional information, resources, or guidance on car insurance.

Sources:

Car insurance rates by state, 2020 edition | insure.com

2020: Most and Least Expensive ZIP Codes for Car Insurance by State | carinsurance.com

Your Guide To Finding the Cheapest Car Insurance | caranddriver.com

Car Insurance Rates By State: Everything You Need to Know | caranddriver.com

Car Insurance | caranddriver.com

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