You should expect to pay more for car insurance in Texas than in Florida. If you're looking for auto insurance, knowing the average cost in your state can be a good way to determine how much you expect to spend. If you've ever purchased car insurance in more than one state, you might have noticed how much rates can vary. And it's not just the state that affects the cost of car insurance.
Your specific zip code may also increase or decrease the amount of money you spend on coverage. Why do car insurance rates fluctuate so much? Ultimately, it's because drivers face certain risks depending on where they live. For example, more densely populated areas have more cars on the road, which means a higher likelihood of accidents, which can lead to higher premiums. And the more expensive it is to live in an area, the higher your premiums are likely to be, as claims will cost more to settle them.
Essentially, the riskier the location, the more auto insurance companies charge for insurance. Risks can range from the number of uninsured drivers in a state to the crime rate in a given neighborhood. In the U.S. UU.
This means that car insurance in the 5 cheapest states is significantly more affordable, especially for people with a good driving record. There are a few reasons why these states offer the most affordable car insurance. Some states in Maine and New Hampshire have very few uninsured drivers, according to the Insurance Information Institute (Triple-I). In addition, many of these states are located in regions that are not prone to inclement weather, which can easily damage a vehicle.
Many of these areas are also relatively rural, which could mean fewer cards on the road and a lower risk of collision. So what makes these states so expensive for car insurance? On the one hand, many of these states are located in areas with extreme weather conditions. Louisiana and Florida, in particular, are affected by hurricanes and severe floods that can cause damage to cars. In addition, Florida and Michigan are among the top four states with the highest number of uninsured drivers.
Where you live isn't the only factor that determines your car insurance rate. One of the first things that an insurance company analyzes is the type of vehicle it owns. For example, newer vehicles often have the latest safety features, which can help reduce the likelihood or severity of an accident, but cost more to repair or replace them. Please note that some states prohibit the use of some rating factors.
Insurance companies in Hawaii and Massachusetts, for example, can't use your age to qualify your policy. California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania prohibit the use of gender as a rating factor. Your state may also prohibit the use of your zip code, credit score, or other factors not related to driving. The best way to know how your state handles insurance ratings is to contact the Department of Insurance or talk to your insurance company about the laws in your state.
If you're moving to a new state, you may want to include your auto insurance update on your checklist. Each state has different insurance laws, and once you're established, you'll need to get a new policy in your new state. You can't just change the address of your old policy; you'll have to buy a new policy and cancel your old one. Car insurance is legally required in almost every state, so it's generally an unavoidable cost.
Some drivers are lucky enough to live in a state with cheap car insurance, while others have to pay thousands of dollars a year. Knowing the average cost of car insurance by state is useful for several reasons, but it's especially important if you're planning to move to a new area of the country. Keep in mind that auto insurance laws vary, so you may need to buy more coverage when you move. Minimum coverage rates were determined using the minimum coverage types and limits required for each state.
These rates are samples and should be used for comparison purposes only. Cate Deventer is an insurance expert who has been a %26 accident and life accident %26 property health insurance license for over 10 years. As an insurance agent, he quoted and issued various types of insurance policies and helped customers with claims. She is passionate about helping people understand their insurance needs, choosing the right levels of coverage, and learning how insurance coverage can affect overall financial well-being.
Cate also enjoys writing and editing, and has since combined her passions for content and insurance. While earning a bachelor's degree in English with a concentration in professional and technical writing from Indiana University, Cate also studied the insurance industry in all 50 states and in Washington, DC. Michigan has the most expensive insurance for multiple reasons, but the main cause is the state's no-fault insurance laws. In that case, insurers may have to base rates for young drivers only on statistics until they establish a driving record, Shepherd said.
A very recent change in car insurance laws affects future costs, but some worry that it could cause some rates to increase even more. Each insurer has its own unique formula for developing rates, and some insurers emphasize certain factors more than others. These programs are ideal for safe drivers, especially those who don't use their cars for long or frequent trips. If you compare one zip code to another, you'll see that average car insurance rates can vary by more than a third, even within the same city.
Currently, California, Hawaii, Maryland, Massachusetts, Michigan, Oregon and Utah prohibit insurers from considering their credit rating. Illinois Residents Can Save on Their Auto Insurance as State Ranks 10th for Best Public Transportation. MoneyGeek analyzed auto insurance quotes across all 50 states to determine the car insurance companies with the cheapest rates. While pay-per-mile insurance also takes these factors into account, it's largely usage-based, meaning your rates are based on the number of miles you drive.
These rates come from public sources of the insurer's statements and should be used for comparative purposes, only their own quotes may be different. Taken together, these factors are likely to contribute to Arizona's auto insurance rates being on par with the national average. One factor that may be preventing car insurance levels in Arkansas from skyrocketing is that the state has the second lowest cost of living. Auto insurance may be more expensive in Sooner State due to high crime rate, dangerous weather, and large number of structurally poor bridges.