Where does your state rank on the list?

Whether you live in sunbaked Arizona or windy Oklahoma, you could easily overpay for car insurance. What makes car insurance prices vary so wildly from state to state? Leading insurance comparison site Insurify analyzed data from over 25 million car insurance premiums to determine which states have the highest and lowest average car insurance costs. 

And if you’re ready to jump right to the best car insurance quote for you, try Insurify to find the cheap car insurance and customized coverage you deserve.

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Why do car insurance costs vary from state to state?

Before people move from one state to another, they tally up the cost of living. Among the house prices, property taxes, and sales taxes, auto insurance rates also find their way onto the checklist. There are four main reasons that car insurance rates differ between states:

State Regulations

Every state but New Hampshire requires car insurance, but no standards exist on set coverages. Generally, the more coverage an individual state requires for its minimum limits, the higher the cost to its drivers. 

Regulations that affect your bill break down to a few key points:

Rating Factors and Rules

States decide which methodology insurance companies can use to set their rates. For example, Hawaii doesn’t factor in age, gender, or credit history. With no established guidelines across the states, it’s no wonder that rates differ. 

Also, 13 states require state approval before rates can increase. These states have seen their rates increase by 45 percent between 1989 and 2019, while others without prior approval regulations have seen rates rise more than 80 percent for the same period. 

Personal Injury Protection (PIP)

PIP, also called no-fault insurance, covers medical expenses for you and your passengers after an accident, regardless of who caused it. It may also pay for lost wages, rehabilitation, or funeral expenses. Your insurer pays PIP claims, and you still must buy bodily injury liability and property damage liability to protect you from claims from another driver. 

Since you must pay for both liability coverage and PIP, many no-fault states have higher insurance costs than at-fault states requiring liability only. You must have PIP coverage in the following 12 no-fault states: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah. 

Uninsured Motorist and Underinsured Motorist Coverage

Uninsured motorist (UM) bodily injury coverage pays your medical expenses if you’re injured by a hit-and-run driver or one who has no insurance. Underinsured motorist (UIM) bodily injury takes care of your medical expenses if you’re hit by someone who does not have high enough policy limits to cover your costs. 

According to the Insurance Information Institute (III), 13 percent of American drivers are uninsured, or about one in eight. Though not without an added cost, 19 states and the District of Columbia require UM alone or both UM and UIM coverage to protect drivers.

Number of Uninsured Drivers

Uninsured drivers hurt everyone on the road. They’re more likely to commit hit-and-runs. And insurers must pay claims when uninsured drivers cause accidents. Those payments are spread among the insured public and push up the cost for everyone. 

Also, the uninsured have hatched a chicken-and-egg problem. As insurance prices increase, fewer people can afford it, and therefore more people go without it. States create more stringent penalties to combat this issue. Even with efforts to curb driving without insurance, you can guess that a state like Florida, where over one in four drivers has no insurance, would set drastically different rates than Maine, where less than one out of every 20 drivers has no insurance.

Population Density

Insurance companies charge more for greater risk. Urban areas have a higher population density, and more cars mean more accidents.

Along with the increased risk, dense areas have a higher incidence of crimes such as car theft, break-ins, and vandalism. Prices increase with population density, so you can expect people in urban states to pay more than in rural states.

Population density isn’t the only factor in car insurance costs, however. South Dakota, one of the least populated U.S. states, doesn’t even crack the top 10 states for least expensive car insurance. 

Age of Drivers

States with the highest percentages of drivers either under 25 or over 65 will see higher rates. Teenage drivers and young adults have the least driving experience. While seniors have plenty of years behind the wheel, aging makes accidents while driving more statistically likely. 

 

Top 10 Most Expensive States for Car Insurance

 

Curious about your state, planning a move, or want to see how much your bordering neighbors pay? Here are the 10 most expensive states for car insurance, followed by the 10 least expensive:

  • Michigan: $2,409 (annually) 

Michigan State fans aren’t shelling out green to show school spirit. The state’s astronomical costs sit 64 percent above the national average of $1,463. Blame its unique no-fault insurance system coupled with more than one out of five drivers having no insurance. 

The Wolverine State used to require all drivers to buy PIP at a level that guaranteed unlimited medical benefits to accident victims. Such a generous car insurance policy significantly drove up premiums as insurers tried to limit the risk. 

The state has put forth efforts to let consumers choose their PIP insurance level and mandated a 10–45 percent price break. Michigan also got rid of rating factors not directly related to driving. A bill that went into effect in July 2020 aims to make rates great in the Great Lake State.

 

  • Florida: $2,178

Florida‘s car insurance prices are just like the gators—big and nasty. Three main reasons keep biting Floridians’ wallets. 

First, drivers must buy PIP in addition to liability. Second, the population has a large concentration of students (thanks to Florida‘s many universities), tourists, and older and retired drivers. Third, Florida has the highest number of uninsured drivers in the country. Put all three together, and you have a perfect tropical storm of car insurance risk that adds up to pricey premiums.

 

  • Maryland: $2,090

People may call it the Free State, but its car insurance certainly costs. The required coverages cause the prices to skyrocket. The state says you must have bodily injury and property damage liability, PIP, uninsured motorist coverage, and uninsured motorist coverage. 

And Maryland has the fifth-highest population density in the nation, so expect higher rates if you live in Montgomery County, Prince George’s County, or Kent County. Add to that Maryland‘s number three ranking for most car accidents in the U.S., and you can see why the rates have more than the crabs feeling blue.

 

  • Georgia: $1,910

Drivers would say that Georgia’s average car insurance rates seem anything but peachy. The people know they must traverse some of the most accident-prone roadways in the country, hiking car insurance rates above those in next-door Alabama and Tennessee

An improving economy has led to more expensive vehicles, meaning more costly repairs after an accident. Analysis has also found the frequency and severity of Georgia‘s claims make it the least profitable for insurers in the South. When insurers can’t make money, expect them to charge rates that leave a sour taste in your mouth despite your sweet tea.

 

  • Delaware: $1,806

It may be recognized as the First State, but to many residents, insurance costs make it feel like the last. The small, tightly packed state has a population density ranked sixth. Older drivers roam the streets and, with slowed reaction times, cause accidents. Delaware sits in fifth place for the percentage of drivers 65 and older.

After accidents, insurers pay for medical expenses, and Delaware‘s healthcare costs reached the top three in the nation. If trends continue, Delaware may find itself in terms of insurance costs ranked as the First State.

 

  • Nevada: $1,760

What happens in Nevada stays in Nevada and runs up your rates. Lax DUI laws and a partygoer attitude from tourists in Las Vegas and Reno may make each trip on the roads a roll of the dice. 

Although residents ranked as safe drivers, when they get in accidents, they’re overly litigious. Nevadans like their lawsuits and luxury cars just as flashy as suites at the Bellagio. Expensive cars mean expensive repairs after an accident. Shuffle these together, and you have many people wishing they could pay their insurance bill with the house’s money.

 

  • South Carolina: $1,634

South Carolina‘s rates will hit you with the zing of a mustard-based barbecue sauce. The state tacks on uninsured motorist coverage to the mandatory liability insurance coverage, costing the consumer extra. Maybe the Palmetto State seeks to protect them because it ranks third for speeding tickets and sixth for most car accidents in the country.

Drivers 65 and older cruise down the streets, and the state sits in 10th place for the percentage in that age bracket. Even with a seersucker on, South Carolinians still sweat over their rates, which are higher than those for North Carolina drivers.

 

  • Louisiana: $1,535

After paying your car insurance, you may have to borrow from a friend to afford a po’boy. Louisiana Insurance Commissioner Jim Donelon said about 40 percent of Louisiana drivers hold the state minimum coverage. He also says that roughly 15 percent zoom around with no insurance, making car insurance in the state more expensive than in next-door Mississippi

Add 40 to the 15, and you have more than half the population with little or no protection at all. When an accident happens, consumers rely on the courts for adequate payout, causing the whole system to absorb the costs. 

To deal with the increases, many insurers have asked the commissioner to approve rate hikes, lest they close business in the state altogether. And hurricanes and flooding force prices to rise, too. For example, in 2016, car insurance companies paid $700 million for damaged vehicles. Take all these elements, put them in a pot, and you’ve got one pricey insurance gumbo. 

 

  • Missouri: $1,519

Missouri sounds more and more like “misery” when residents pay their car insurance bill. On top of liability, the state mandates uninsured motorist coverage. The added protection comes with a price, but it’s an effort to combat claims resulting from one in seven people driving without insurance.

You’ll pay more if you live in St. Louis, Kansas City, Springfield, Columbia, or Joplin, which make up the top five metros. 

The costs continue to stack because insurers only file rates with the insurance commissioner after using them in the market. So the state deals with price hikes after the fact. As rates rise, you can almost hear an insurance company CEO telling members of the Show-Me State to “show me the money.” 

 

  • Texas: $1,506

Everything’s bigger in Texas, including the insurance bills. And the second most populated state boasts some of the densest metros like Dallas-Fort Worth, Houston, San Antonio, and Austin. Joyriding through those cities, you’ll find many teenage and young adult drivers. Texas ranks in the top five for that age bracket because of its high birth rate. 

Large numbers of inexperienced drivers skyrocket rates. Stir in the fourth-highest cost for healthcare in the nation, and insurers end up paying hefty medical claims that ultimately get handed off to the public through raised prices. If the state keeps this up, after you pay two grand to the insurance company, a quarterback will refer to a shiny silver piece of change the insurer hands you back. 

 

Top 10 Least Expensive States for Car Insurance

 

  • Hawaii: $567

Say aloha to savings in car insurance paradise. Hawaii rates drivers by their address or location, insurance history, and driving record only. Credit score, age, gender, marital status, and even driving experience don’t factor into the equation. 

The state also approves all insurer rate hikes beforehand to limit the cost of insurance. And the laid-back culture leaves residents with the third-fewest annual miles driven of all the states. Fewer miles equals fewer accidents and less risk for insurers, which results in lowered premiums. No wonder people move to Hawaii and lei on the savings.

 

  • Vermont: $641

You can save some serious greenbacks in the Green Mountain state. Vermont combines a relatively low population density with a fifth-place ranking for the fewest drivers with no insurance, meaning Vermonters get a deal on car insurance rates that’s sweeter than maple syrup.

 

  • Massachusetts: $654

Ready for a wicked awesome insurance rate? Just move to Massachusetts. The Bay State jumps out at third place nationwide for the fewest number of uninsured drivers. Couple that info with its strict rating factors that only relate to driving, then add in relatively few teenage and young adult drivers, and you can build a picture of why Massachusetts has affordable rates. 

Bay Staters should dunk their donuts with joy for all the money they pocket, especially compared to neighboring Rhode Island and Connecticut.

 

  • Maine: $691

Mainers can warm up to prices that fit like the perfect pair of Beans. There’s enough room for rural drivers to spread out, and relatively low population density kicks the price down. 

On those sparse roads, seeing an uninsured driver never happens, almost like turning down a $5 “lobstah.” The state that leads the nation with fewest drivers with no insurance also ranks in the top 10 for safest drivers when measured by the number of deaths. So crack open a can of Moxie after you count the money you’ve saved. 

 

  • Minnesota: $702

What’s better than a bite of a Jucy Lucy? Taking a chunk out of your insurance costs. Minnesotans can do just that because they live in the second-safest state when calculated by the number of deaths. 

And when insurers must pay out medical claims, Minnesota ranks seventh for affordability and ninth for overall healthcare. That means accident victims get healed up for amounts that don’t pass on massive debts to the insured public. All that leaves residents with an insurance rate that’s more than nice—it’s Minnesota nice. The state may be chilly, but at least it’s warmer than Alaska

 

  • Idaho: $804

You need not take part in the Snake River Stampede to lasso a good deal. Idahoans live in the seventh most rural state, so population density stands squarely on your side. Idaho’s average car insurance prices look especially good when compared to much pricier quotes in nearby Oregon and California, which are both more heavily populated and regulated than the Gem State. 

The legislature requires nothing more than liability coverage, and it ranks just shy of the top 10 for fewest uninsured drivers. Shake up the data, and the resulting rates seem almost as pleasing as potato ice cream. 

 

  • New Hampshire: $833

Who’s surprised that the Granite State would be home to rock-bottom prices? New Hampshire, the only state that doesn’t require insurance, is shockingly in the top third of the country for the fewest number of uninsured drivers.

Granite Staters rank in the top five for the fewest number of teenage and young adult drivers. Put more experienced drivers on the list with the other facts. And you might figure that insurance savings and New Hampshire go together like the marshmallow and peanut butter in your “fluffa nuttah.”

 

  • Wyoming: $876

Are Wyomingites ready for a deal sweeter than a deep-fried Oreo? The state has crunched down its number of uninsured drivers, so Wyoming ranks just shy of the top 10 for fewest, beating out bordering Montana and Colorado with its low car insurance quotes

It’s hard to see almost anybody on the road when you’re the second most rural state, anyway. And the state requires liability only, meaning you don’t pay for more than you want. The Equality State gives almost unequaled savings. 

 

  • Wisconsin: $884

Cheeseheads like to put cheddar in checking accounts too. Save on car insurance in the ninth-safest state by the number of deaths. Its population density sits right in the middle, meaning it beats about half the states. 

Wisconsin‘s healthcare also ranks 14th in the nation, which allows insurers to pay for quality care for accident victims at a cost that’s better than two-thirds of the country, all things being equal. For Wisconsinites, low car insurance belongs on the list of necessities right up there with the batteries, blankets, and snowsuits in the trunk.

 

  • Iowa: $886

Iowans can find a price prettier than the Pork Princess. The Hawkeye State ranks 14th for the fewest uninsured drivers and 13th for the most rural, beating out other Midwestern states like Indiana, Ohio, and Illinois.

And it mandates liability only and has the most affordable healthcare costs in the country. When all these stats come together, Iowa ends up as one of the top 10 cheapest states, with a price smoother than the state fair’s cow made of butter.

*Rankings compiled from national, state, and local governments, news sources, the Insurance Information Institute, and proprietary Insurify data, accurate as of 2020. 

Other Factors That Determine Car Insurance Cost

The cost of healthcare, driver safety, repair costs, and other components can all contribute to car insurance prices. After looking at all the reasons premiums rise, what can you do to save? 

Tips to Lower Your Car Insurance Rates

Count on these nine ways to make your rates more affordable:

  1. Bundle. Get your homeowners insurance or renters insurance from the same company.
  2. Check low-mileage or usage discounts. If you don’t drive a lot, you might qualify for a discount or even a usage-based plan.
  3. Compare before you buy. Get a rate you love before you even test-drive the car.
  4. Learn about group insurance. Alumni, business, and professional associations could save you money.
  5. Maintain good credit. Paying off debt and increasing your score get you lower rates with insurers.
  6. Raise deductibles. If you can afford $1,000 instead of $500 in case of an accident, you’ll save on your premium.
  7. Reduce coverage. Does your older car really need full coverage, or can you get by with liability insurance only?
  8. Seek all discounts. Don’t skip defensive driving courses or discounts for vehicle safety equipment or good grades.
  9. Shop around. A car insurance comparison tool, like Insurify, offers the best way to get a price you can afford in about two minutes.

10 Best and Worst States for Car Insurance Costs: FAQ

What is the most expensive state for car insurance?

Michigan has been the most expensive insurance in the nation on and off for several years now. The average cost for car insurance in Michigan is $2,409 a year, which is 64 percent above the national average of $1,463. Blame the state's unique no-fault insurance system coupled with more than one out of five drivers having no insurance. That said, Michigan recently introduced legislation that changes the way car insurance is regulated in the state and that will hopefully lower driver’s average premiums.

What is the least expensive state for car insurance?

Hawaii has a $567 yearly premium that should make you say mahalo as you greet the car insurance paradise. The state rates drivers only by their address or location and insurance history, requires prior approval before insurers can raise rates, and creates a laid-back culture that has them third in the country for fewest miles driven.

How can I compare cheap car insurance quotes?

Want the best price in your state? Check a website that collects quotes from the auto insurance companies available in your area. Find a car insurance comparison tool like Insurify to break down up to 10+ real quotes in just a few minutes for your combined driver profile, and unlock savings and car insurance discounts.

Conclusion: How to get the best and cheapest car insurance

Whether you’re from Nebraska, West Virginia, or any of our 50 states, you can go to Insurify for the fastest, easiest way to compare car insurance quotes based on your unique driver profile. Shop ready-to-buy policies from top-rated national and regional companies such as State Farm, GEICO, Progressive, and more. Think of it as your personal insurance agent that’s there for you whenever you put the key in the ignition!

 

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Updated November 25, 2020

Courtney Roy is a financial and technology copywriter. He creates content that makes an actionable difference in the life of his readers. In addition to years of experience across multiple industries, Courtney has insurance licenses, a real estate license, and a degree in electrical engineering. He and his wife chase their five kids in the Phoenix, Arizona sun. You can learn more at thecopyprophet.com.