Finance Blog

Auto Insurance Policy Rates Vary By State

Written by Ilyce Glink on March 15, 2012 in Insurance  |   4 comments

Owning a car is expensive. In addition to maintenance, parking, and gasoline, drivers are required to pay for car insurance—it’s mandated by law, and it could save you a lot of money if you end up in an accident. Even so, an auto insurance policy…

saving money auto insurance policyOwning a car is expensive. In addition to maintenance, parking, and gasoline, drivers are required to pay for car insurance—it’s mandated by law, and it could save you a lot of money if you end up in an accident. Even so, an auto insurance policy is an expense most drivers wish they could do without.

Your yearly insurance budget depends on where you live. According to Insure.com, drivers in Louisiana, Oklahoma, and Michigan pay the most for car insurance. If your goal is saving money, move to Wisconsin, Iowa, or Maine for the lowest auto insurance rates.

Uninsured drivers do the most to drive up prices. Motorists hit by uninsured drivers have to rely on their own coverage to fix their cars or pay for medical attention. According to the Insurance Research Council, Oklahoma and Florida—ranked number two and 13 respectively on the list of most expensive states for car insurance according to Insure.com—each have an estimated 24 percent of uninsured drivers. Massachusetts and Maine, ranked number 25 and 51, each have only 4.5 percent of drivers without insurance.

Premiums in any state can be dependent on a variety of factors, including:

  • The number of uninsured drivers behind the wheel statewide
  • A state’s insurance laws
  • The level of competition among carriers
  • Severe weather

The states with the highest insurance policy premiums have their own issues to contend with. Louisiana, the state with the highest insurance cost, is the only state that requires claims to reach $50,000 before going to jury trial. Insure.com says that lawsuits involving claims for less than that go to specific judges, and those judges tend to side with their constituents instead of insurance companies. The costs of those claims and legal fees are then passed down to consumers.

Maine, on the other hand, can credit its low percentage of uninsured drivers for the state’s lower insurance rates. Those factors, combined with a low crime rate and good weather over the past few years, have helped keep the price of insurance low. Competition between carriers for consumers’ business keeps rates low, too.

All hope is not lost if you live in an expensive state, according to Amy Danise, editorial director of Insure.com. She notes, “Many of these problems are outside the control of the drivers. But even if you live in an expensive state, you can hold down your insurance costs by keeping your driving record as clean as possible and selecting a car that is cheap to insure.”

State rankings of auto premiums for 2012, according to Insure.com:

state auto insurance ranking











































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Ilyce R. Glink is the author of several books, including 100 Questions Every First-Time Home Buyer Should Ask and Buy, Close, Move In!. She blogs about money and real estate at ThinkGlink.com and at the Home Equity blog for CBS MoneyWatch.



  1. Larry McLaughlin says:

    Where are the rankings for the other 26 states?

  2. j. gresham says:

    yeah, where are the other rankings? May i buy car insurance from the other cheapest state?

  3. EFX Finance Blog editor, JF says:

    You can find the full list of state auto insurance rates from the source, Insure.com: http://www.insure.com/car-insurance/car-insurance-rates.html

    Thanks for reading, and hope to see you back on the blog soon.

  4. InsuranceQuotesFast says:

    Labor costs also affect the price of insurance. Some states have higher auto body costs because of higher certification requirements for auto body workers, and therefore higher insurance premiums.

    We cover some other reasons on our blog: http://www.insurancequotesfast.com/blog/car-insurance/insurance-rates-state-to-state/

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