Which States Have the Cheapest Auto Insurance Rates?
The top three states that have the most affordable car insurance rates are Maine, Ohio, and Wisconsin. The states the cheapest car insurance rates typically have a cheaper cost of living and moderate weather, including less risk for natural disasters. Read our guide for more information on states that have the cheapest auto insurance coverage, including a free comparison tool so you can start comparing auto insurance quotes in your state.
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UPDATED: Jul 20, 2021
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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. The insurance company or insurance provider takes all of these factors into account when calculating the monthly insurance rate they offer in a particular state.
Which states have the cheapest auto insurance rate? Without further ado, let’s answer that question.
Top 15 States With the Cheapest Auto Insurance Cost
Wondering which state has cheap car insurance? Auto insurance company Insure.com compiles an annual study of the states with the cheapest car insurance coverage 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 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 car insurance policy, by the way, is $1325. You might be surprised that Mississippi is not on this list. Although it may be the cheapest state to live in, its average car insurance rate is $ 1,800, depending on the insurer.
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Why Are Some States More Expensive Than Others?
Car insurance cost can vary widely between states. You can probably guess why some of the above states are more expensive than others. Though it is still important to remember that your car insurance coverage options and car insurance rate offer can still be affected by credit score.
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. You can also search for the complete list of car accidents by state if you want more information.
Different Legal Requirements: Some states simply have different laws and auto insurance requirements. In some states, an auto insurance company is 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. The insurance rate reflect that.
Quality of Drivers: Some states have worse licensed 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 policy rates because of other natural disasters. In California, homeowners pay higher property or home insurance policy 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 coverage 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.