In studies that have been conducted by the National Association of Insurance Commissioners (NAIC), they have found that residents who live in the District of Columbia, New Jersey, Louisiana, New York, Florida and Massachusetts tend to pay more on average for their automobile coverage.
Although with each year, the order may change in which state has the highest premiums; the above mentioned are usually among the top of the list annually. Even though these particular parts of the country are usually the most expensive to insure vehicles, premiums constantly change for many different reasons. As a matter of fact, in the last year, Michigan motorists have suffered a very high increase in rates which have put them right behind New Jersey in the most expensive annual average premium paid.
Why Certain States Have the Highest Auto Insurance
There are many factors that affect why certain areas’ rates are higher than others. One of the major factors is the types of coverage that is being purchased in these particular areas. For example, if a certain state has a prosperous economy, the residents are more likely to purchase new vehicles. Since most motorists who operate newer vehicles typically purchase physical damage coverage (whether their financial institution requires it or not), this drives the average cost of premiums up when evaluated by the NAIC and compared to those who reside in places that are only need of basic policies which do not cover their automobiles.
Population and traffic density can play a big part in what an individual will pay for coverage as well. For instance, the more heavily populated an area is, the higher the chances of a traffic accident; as claims begin to rise, premiums will follow in order to compensate for losses incurred by insurers. In addition, residents of cities with high crime rates are also subjected to inflated rates for protection for physical damage; this is due to the fact that their vehicle may be more at risk to theft or vandalism.
Keeping Rates Down in a State with High Car Insurance Rates
Unfortunately, some motorists may not be able to control where they live and therefore may suffer from higher premiums due a dense population or crime rate. Although this may be case, there are actions that individuals can take in order to keep their rates down. One approach that a motorist should take is to always practice safe driving. A driver’s record will play a big part in determining what they will end up paying to insure their vehicle. Although some accidents are unavoidable, there are laws in some states which protect individuals from having their premiums increased if they are involved in an accident where they are not at fault.
One of the most effective ways to save on policies is to compare quotes from various insurers. Obtaining and comparing quotations is absolutely free and is recommended by just about every state’s department of insurance in order for their residents to save on coverage. There are many factors which can cause premiums to fluctuate and this includes the company’s profits and losses; while one company may view a particular driver as a risk, another insurer may not judge them as harshly and offer them a more affordable price. By completing a comparison of multiple providers, individuals will raise their chances of finding the best deal possible for their particular needs.