One of the biggest determining factors of your car insurance premium could be where you live.
That’s why the comparison car insurance shopping app Jerry.ai has you covered on the nitty-gritty of why car insurance premiums vary so much from state to state.
Read on if you’re interested in finding out which states have the lowest car insurance costs and which have the highest.
Oh—and we’ll also show you that Jerry users found big savings on their car insurance premiums, regardless of their state.
Which states have the cheapest car insurance?
When it comes to cheap car insurance, Maine is the clear winner with an average annual premium of just $912. That’s less than a third of the cost of the most expensive state, Michigan, where drivers pay an average of $2878 every year.
The rest of the states fall somewhere in between. Generally speaking, though, New England and the Great Lakes region are home to a number of states with the cheapest car insurance.
What makes car insurance prices vary by state?
In addition to location, there are many state-specific factors that affect insurance premiums. That being said, the states with the cheapest car insurance tend to be those that have a number of mitigating factors.
Urban car insurance rates are usually more expensive than rural ones. Increased traffic and congestion lead to increased accidents — or at least the potential for more accidents.
This means that states with lower population densities tend to have cheap car insurance when compared to states with higher population densities. You’ll find that this holds true within states, as well, meaning premiums are lower in rural zip codes than in urban ones.
Different states have different insurance regulations and minimum insurance requirements. States with no-fault insurance systems—where every driver involved in an incident pays for their own damages and injuries—often pay higher premiums because they have added financial risk and responsibility.
As states increase or decrease their mandatory coverage, insurance rates tend to increase or decrease as well. For example, in Florida and Michigan injury protection is required coverage, which ends up costing drivers more.
States with a history of severe weather typically have higher annual averages, since this represents an added risk for insurance companies.
In southern coastal states, hurricanes and flooding are major concerns. In northern areas, winter storm damage and poor road conditions drive up premiums.
In states with poor economic conditions, crime tends to be higher. Drivers are also more likely to be uninsured or underinsured, meaning they don’t have the required minimum coverage. Insured drivers bear the cost of accidents and incidents from uninsured drivers, which leads to higher insurance premiums.
Again, this holds true within states as well. Prosperous areas generally have lower insurance rates than areas with higher rates of poverty.
Level of insurer competition
As in many industries, the more competition there is between car insurance companies, the better your chances of securing cheap car insurance quotes. Not all insurance companies do business in every state, so some states may have a multitude of different options for you to choose from and others may have very few.
If you live in a state with many different insurance provider options, compare car insurance quotes to ensure you’re getting the best rate.
Don’t know where to start?
No worries, Jerry.ai is already a few steps ahead. Entering your info takes less than a minute. Jerry won’t only find you the best coverage at the best price, it will also have you covered from end to end. That means no calls, no forms, and no hassle, just cheaper insurance.
The 5 states with the lowest car insurance
The states with the lowest car insurance premiums tend to have a few things in common. Lower population densities, fewer uninsured motorists, and a healthy amount of competition among insurance providers all help keep costs down for drivers.
Maine enjoys some of the most beautiful coastline in the country—and the cheapest car insurance (a winning pair!). Maine drivers pay an average cost of $912 per year for their car insurance premiums, putting them about 40% below the national average.
There are a few key reasons for this. Maine has a fairly low population density, ranking 38th in the country, with historically low auto insurance losses. They also boast the lowest percentage of uninsured drivers (4.5%), allowing rates to remain low for everyone.
The top 5 cheapest insurers in Maine are:
- USAA $526
- Geico $543
- Travelers $668
- State Farm $805
- Progressive $916
If you live in Maine and enjoy the lowest car insurance rates in the country, that doesn’t mean you shouldn’t bother looking for deals. In fact, Jerry.ai users in Maine saved a whopping average of $2111 when they switched to Jerry!
2. New Hampshire
New Hampshire comes in second lowest for cheap car insurance with an annual average of $985.
Interestingly, the state doesn’t require that drivers carry insurance — only that they can show sufficient funds to adhere to the state’s financial responsibility requirements. The easiest way to do this, however, is by having car insurance.
New Hampshire is average in terms of population density, but a mainly rural population with few accidents and claims means low rates for the state as a whole. There are also many insurers competing for customer business, which makes finding cheap car insurance quotes is relatively easy.
The top 5 cheapest insurers in New Hampshire are:
- USAA $534
- State Farm $765
- Progressive $807
- Geico $815
- Nationwide $1001
Similar to Maine, it paid off for drivers in New Hampshire when they saved an average of $868 on their annual car insurance premiums by switching to Jerry.
Ohio only recently entered the top five states with cheapest car insurance, with average annual premiums of $1034.
The low rates can mainly be attributed to a large, competitive market for auto insurance. With about 250 different insurers offering coverage in the state, customers have a much easier time finding affordable policies than in other areas of the country.
The top 5 cheapest insurers in Ohio are:
- USAA $614
- Geico $707
- Travelers $793
- American Family $862
- State Farm $943
But just because it’s easy to find a good price in Ohio doesn’t mean you should go with one of the first quotes that seems like a good deal, especially when Jerry.ai customers in Ohio saved an average of $2847 when they switched to Jerry.
Wisconsin drivers pay an average of $1049 annually for their car insurance, putting them 31% below the national average.
The state has a middle-of-the-road population density, ranking 25th in the country. It also has a fairly rural population, which typically means fewer accidents and lower rates, and a good amount of insurer competition.
That being said, the state is a bit of an anomaly when it comes to a couple of the other factors that affect insurance premiums. About 14% of Wisconsin drivers are uninsured, and the area sees a good amount of annual snow and the occasional tornado. But neither factor seems to be enough to affect the affordability of their car insurance.
The top 5 cheapest insurers in Wisconsin are:
- USAA $567
- Geico $857
- State Farm $879
- Nationwide $927
- American Family $1001
Make sure you’re getting the best rates Wisconsin has to offer by using Jerry.ai. Customers in Wisconsin saved an average of $1198 on their car insurance premiums when they switched to Jerry.
Potatoes and cheap car insurance aren’t bad things to be known for. Speaking of, Idaho rounds out the top five states with the cheapest car insurance. Drivers in this state pay average annual premiums of $1062, which is about 30% below the national average.
The rates in Idaho tend to remain low because it’s mostly rural. It’s the seventh least dense state in the country, with just 20 people every square mile. Most drivers in Idaho are also insured (just 8% aren’t), keeping rates low across the state.
It also helps that Idaho is immune from most severe weather and has a competitive insurance market, with more than 185 different companies battling for business. These factors help keep rates low for drivers.
The top 5 cheapest insurers in Idaho are:
- USAA $517
- State Farm $793
- Travelers $837
- Geico $858
- American Family $1038
Drivers that wanted the best prices in Idaho saved an average of $905 when they switched to Jerry.
The 5 states with the highest car insurance
On the other end of the spectrum, let’s look at the five most expensive states for car insurance.
Michigan comes in at the top for high expensive car insurance — and by quite a bit. The average annual premium is $2878, which is a jaw-dropping 90% above the national average for car insurance.
The unique insurance system in the state can account for the high rates. Michigan has no-fault insurance, which means that every driver involved in an incident must cover their own damages and injuries, regardless of who was at fault.
For this reason, Michigan requires all drivers to carry Personal Injury Protection (PIP) insurance. While most states have reasonable PIP coverage amounts, Michigan guaranteed unlimited, lifetime medical benefits to car accident victims. This is a huge risk for insurers and raised premiums.
The state also ranks fourth highest in the country for uninsured drivers, with about 20% foregoing car insurance.
The top 5 cheapest insurers in Michigan are:
- Safeco $386
- MetLife $1337
- USAA $1477
- Chubb $1704
- MEEMIC $2004
If you live in Michigan, it doesn’t mean you’re doomed to pay an outrageous rate. In fact, drivers in Michigan saved an average of $1183 when they switched to Jerry.
Louisiana drivers are paying about 57% more than the national average, with an average annual premium of $2389.
The biggest factor driving up rates in the state are uninsured and underinsured drivers. About 13% of drivers in Louisiana don’t carry insurance at all, while another 40% only carry the absolute minimum.
This leads to uninsured drivers getting into accidents and suing each other. And since judges typically side with drivers over insurance companies, insurers pass the costs of large settlements onto drivers through high insurance premiums.
The top 5 cheapest insurers in Louisiana are:
- Southern Farm Bureau $1636
- USAA $1856
- MetLife $1873
- State Farm $2163
- Cal Casualty $2292
If you’re looking for savings in Louisiana, try Jerry.ai. Drivers saved an average of $1016 when they switched to Jerry.
Florida has a perfect storm of factors that keep insurance rates high. Drivers in the sunshine state pay an average of $2239 per year, which is nearly 50% above the national average.
More than a quarter of the drivers in the state are uninsured, which drives up insurance costs for everyone. The population is also full of drivers that insurers consider high risk: older people, students, and tourists.
The weather plays a role in raising premiums, too. Florida frequently sees severe weather — namely hurricanes — that can cause significant damage to vehicles and lead to more claims.
Finally, the state has a PIP system similar to Michigan’s, though it doesn’t have unlimited lifetime payouts. Nonetheless, this raises insurance costs.
The top 5 cheapest insurers in Florida are:
- USAA $1014
- Allied $1790
- State Farm $1834
- Travelers $1907
- Auto-Owners $2128
Worried about finding reasonable car insurance in the sunshine state? Jerry.ai customers in Florida saved an average of $2344 when they switched to Jerry.
Drivers in Texas pay an average of $2050 each year for their insurance coverage. There are a number of reasons behind the inflated rates, which are 35% higher than the national average.
Though Texas might seem mainly rural, the state is home to three of the largest cities in the country: Dallas, Houston, and San Antonio. Since accidents are more likely to happen in urban areas, rates tend to be higher.
Texas is also a hotspot for car accidents, with the Insurance Institute for Highway Safety (IIHS) reporting 3,305 fatal accidents in 2018 — the most in the U.S.
Texans also have a penchant for driving fast (the highway between San Antonio and Austin has a speed limit of 85 mph) and driving under the influence, neither of which insurers look kindly upon when determining premiums.
The top 5 cheapest insurers in Texas are:
- Travelers $1031
- Cal Casualty $1410
- USAA $1461
- Elephant $1464
- Esurance $1478
If you’re tired of paying high premiums in Texas, try Jerry. Drivers in Texas saved an average of $1535 when they switched to Jerry.
Drivers in California pay high insurance rates for many of the same reasons as Texans do. The average annual premium is $1968, which is 30% above the national average.
California has three of the biggest cities in the country, which translates to a lot of drivers on the road — 26 million, to be precise. Higher density areas have higher rates due to the potential for accidents.
Crime rates tend to be fairly high in some of those larger cities, increasing the potential for claims and, along with it, comprehensive coverage costs.
The cost of living in California is also quite high, and this can lead to drivers cutting corners when it comes to securing adequate insurance. Some drivers may choose to carry the minimum, leading to greater risk for insurers and higher premiums overall.
The top 5 cheapest insurers in California are:
- Esurance $1164
- Progressive $1568
- California Capital $1621
- Mercury $1643
- 21st Century $1665
Are you a Californian feeling the crunch on car insurance? Jerry.ai customers in California saved an average of $1661 when they switched to Jerry.
Frequently asked questions
How do I handle my insurance when I move to a new state?
Since states have different laws and minimum requirements, moving to a new state almost always means getting a new insurance policy. Deadlines to switch your policy may vary, but it’s a good idea to address this as soon as possible.
You’ll need to determine what the minimum coverage is in your new home and then start shopping around to compare car insurance quotes. Always check with multiple providers, as you may find a significant price difference for similar coverage.
How can I keep my car insurance low?
The best way to keep your car insurance premium low is to maintain a good driving record. This means a record that is free of speeding tickets, accidents, and other claims.
Other factors that can help lower your insurance include keeping it parked in a secure place (like a garage) at night, using winter tires if you live in a cold climate that gets snow, and looking at multi-line discounts.
Compare cheap car insurance quotes with Jerry
If you’ve ever tried car insurance comparison shopping on your own, you probably know what a particular misery it can be.
Jerry.ai contacts your insurance company to get the details of your current coverage so you don’t have to scale a mountain of questions. You get all the best prices and coverage with none of the legwork.
The savings keep coming even after Jerry finds you a great plan. Before every policy renewal period, you’ll be presented with three competitive quotes, which means you’ll always have the best coverage at the best price, no matter what state you live in.
Haven’t shopped for insurance in the last six months? There might be hundreds $$$ in savings waiting for you.
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