Which States Have the Cheapest Auto Insurance Rates?

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Leslie Kasperowicz
14 Years in the Insurance Industry (CSR & Writer)https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/4autoins-live/6ea5d860-leslie-kasperowicz.jpg

UPDATED: Mar 13, 2020

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Auto insurance rates vary widely between states. America is a diverse country with a wide range of weather conditions, driving hazards, and laws. Insurance companies take all of these factors into account when calculating the insurance rates they offer in a particular state.

Which states have the cheapest auto insurance rates? Without further ado, let’s answer that question.

Top 15 States With the Cheapest Auto Insurance Costs

states with cheapest auto insuranceAuto insurance company Insure.com compiles an annual study of the states with the cheapest auto insurance costs. Typically, we see the same states appear at the top of that list year after year. Michigan has been the most expensive or second most expensive state for six years in a row, while Louisiana and California also frequently appear in the top 10.

Based on data from 2016, here are the top 15 states with the cheapest auto insurance costs (total cost per year)

1) Maine: $808

2) Ohio: $900

3) Wisconsin: $912

4) Idaho: $935

5) New Hampshire: $941

6) Vermont: $942

7) North Carolina: $987

8) Iowa: $989

9) Virginia: $1020

10) Illinois: $1035

11) Hawaii: $1049

12) New York: $1050

13) Missouri: $1056

14) Utah: $1061

15) Alaska: $1078

The national average policy cost, by the way, is $1325.

Why Are Some States More Expensive Than Others?

Insurance costs vary widely between states. You can probably guess why some of the above states are more expensive than others. In general here are some of the reasons the states above appeared on our list of the cheapest or most expensive states:

Weather: Driving on icy or snowy roads for 4 or more months of the year vastly increases your risk of getting into an accident.

Urban Versus Rural Areas: Urban drivers are far more likely to get into an accident than rural drivers. Hawaii, Alaska, Iowa, and Idaho have few major cities, which is one reason they may appear on the list above.

Different Legal Requirements: Some states simply have different laws and auto insurance requirements. In some states, insurance companies are required to cover a wider range of things in the event of a collision, for example.

Cost of Living: The cost of living varies widely across America. Insurance rates reflect that.

Quality of Drivers: Some states have worse drivers than others. Certain states may have relaxed driver’s license requirements, for example, while other states are strict about who they allow on the road. Fortunately for us, this isn’t a subjective question: The National Highway Transportation Safety Administration regularly lists the states with the best and worst drivers, based on crash data like fatalities per miles traveled, failure to wear seat belts, drunken driving, careless driving, and failure to obey traffic signals. Based on this information, the worst states based on driver quality include South Carolina, North Dakota, Delaware, New Mexico, Alabama, Arizona, and Montana based on data from 2016.

Natural Disasters: Louisiana frequently appears at the top of the list because most of the state is prone to flooding and hurricanes. Other states have higher insurance rates because of other natural disasters. California has higher property insurance rates across the board because of the risk of earthquakes, for example.

Of course, there are always exceptions to these rules. Many people are surprised by how (relatively) cheap auto insurance is in Alaska and Hawaii, for example – two states with some of the highest costs of living in America. This can be traced to the lack of major urban areas, among other differences.

Texas has one of America’s most shocking driving stats: every day for the past 16 years, at least one person has died on a state road in Texas. In November 2016, that accounted for a streak of 55,578 deaths since November 7, 2000.

Ultimately, insurance rates vary widely between states. Make sure you compare auto insurance quotes when moving to a new state – you could be eligible for enormous cost savings if you pick one of the states with the cheapest auto insurance rates.

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