Published: April 25, 2022Updated: July 29, 2022

Which State Has the Highest Cost of Car Insurance?

On average, car insurance costs the most in Louisiana.

The cost of car insurance varies widely by state. While the latest national average cost of car insurance is $1,070.47 per year, the annual cost for a single car can range from $696.37 in Maine to $1,557.22 in Louisiana. Why does the state matter so much when it comes to auto insurance, and where does your state rank?

Which State Has the Highest Cost of Car Insurance?

Louisiana has the highest cost of car insurance. According to the latest data from the National Association of Insurance Commissioners, the average annual cost of car insurance in Louisiana in 2019 was $1,557.22, 45 percent higher than the national average.

Average Annual Cost of Auto Insurance by State

See below for your state’s average annual cost of auto insurance:

State Average annual cost of car insurance in 2019
Alabama $932.14
Alaska $991.09
Arizona $1,063.93
Arkansas $897.92
California $1,051.79
Colorado $1,174.87
Connecticut $1,237.55
D.C. $1,289.93
Delaware $1,440.58
Florida $1,414.17
Georgia $1,259.49
Hawaii $839.87
Idaho $738.10
Illinois $939.64
Indiana $777.05
Iowa $714.86
Kansas $818.99
Kentucky $935.61
Louisiana $1,557.22
Maine $696.37
Maryland $1,236.61
Massachusetts $1,182.69
Michigan $1,495.94
Minnesota $892.17
Mississippi $975.58
Missouri $929.91
Montana $834.86
Nebraska $807.30
Nevada $1,292.52
New Hampshire $864.35
New Jersey $1,395.53
New Mexico $932.67
New York $1,445.30
North Carolina $741.70
North Dakota $703.73
Ohio $802.72
Oklahoma $908.95
Oregon $990
Pennsylvania $992.33
Rhode Island $1,382.64
South Carolina $1,114.90
South Dakota $745.33
Tennessee $863.39
Texas $1,143.85
Utah $954.14
Vermont $785.37
Virginia $861.18
Washington $1,066.84
West Virginia $946.03
Wisconsin $767.42
Wyoming $776.22

States With the Cheapest Car Insurance

In Maine and North Dakota, the two states with the cheapest car insurance, your annual premium may be 54 and 52 percent lower than the national average, respectively.

State Average annual spending on car insurance in 2019 Difference from national average
Maine $696.37 -54%
North Dakota $703.73 -52%
Iowa $714.86 -50%
Idaho $738.10 -45%
North Carolina $741.70 -44%

DID YOU KNOW?

Seven out of the 10 cheapest states for car insurance are in the Midwest, which boasts fewer densely populated areas than the West Coast or East Coast.

States With the Most Expensive Car Insurance

After Louisiana, Michigan, New York, Delaware, and Florida are the states with the most expensive car insurance.

State Average annual cost of car insurance in 2019 Difference from national average
Louisiana $1,557.22 31%
Michigan $1,495.94 28%
New York $1,445.30 26%
Delaware $1,440.58 26%
Florida $1,414.17 24%

Why Does the State Affect the Cost of Car Insurance?

When it comes to the cost of car insurance, why does the state you live in matter? There are a few reasons.

    Car insurance requirements: Some states, like Michigan, require more coverages and higher limits, which means higher premiums. See your state’s car insurance requirements in our complete guide to car insurance.
  • Fault system: Car insurance is cheaper in at-fault states than in no-fault states.1
  • Fraudulent claims and lawsuits: States with more fraudulent claims and accident lawsuits have higher auto insurance costs.

Other Factors That Affect Premiums

Of course, the state you live in isn’t the sole factor that determines how much you’ll pay for car insurance. These are some other factors that affect insurance costs:

  • Population density: In more densely populated areas, car insurance costs more. This is due to higher crime rates and more accidents in densely populated cities. In general, the more people and cars there are around you, the more likely you are to get into an accident or have your car stolen or vandalized.
  • Crime rates: Crime includes everything from motor vehicle theft to vandalism to hit and runs. More crime means more covered claims for those with uninsured motorist coverage or comprehensive coverage, and the greater the likelihood of a claim being filed, the higher the cost of insurance will be. Urban areas, which tend to have more crime, have higher car insurance rates than rural or suburban areas.
  • Percentage of uninsured drivers: If there are more uninsured drivers, then insured drivers need more uninsured motorist coverage, which increases premiums.
  • ZIP code: ZIP codes with more crime result in higher insurance costs as well.
  • Driving record: People with a clean driving record will pay less for insurance than people with a history of at-fault accidents, speeding tickets, and DUIs. In other words, a safe driver won’t experience the rate increases that an unsafe driver will.
  • Credit score: In every state except California, Michigan, Massachusetts, and Hawaii, auto insurance companies can charge people with poor credit more for insurance and those with good credit less for insurance. In these states, car insurance companies can legally use credit scores to determine premiums.
  • Gender: In the same vein, in every state except California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania, men pay more for car insurance than women. The reasons?2 Men, especially younger men, have higher rates of traffic fatalities, DUIs, and being stopped by the police.
  • Marital status: Married people get lower car insurance rates than unmarried people, even if they were married previously.
  • Deductibles: The higher your deductible is, the lower your premium will be, as you’re taking on more of the financial risk in an at-fault accident.
  • Limits: Higher limits result in higher premiums.
  • Coverages: More coverage also means higher premiums.
  • Gaps in coverage: If you cancel your car insurance outright, you could pay more for car insurance when you need to purchase it again than if you had continuous coverage.
  • Age: The cost of car insurance for teens is higher than for any other age group, as teens almost always have the least driving experience. Rates decrease for drivers over the age of 25, though.

 

TIP:

Instead of canceling, suspend your car insurance temporarily by dropping specific coverages. This will prevent a lapse in coverage, leading to lower premiums in the future.

Does Every State Require Car Insurance?

Every state requires car insurance except New Hampshire and Virginia. However, the states that don’t require car insurance still require drivers to demonstrate some form of financial responsibility.

In New Hampshire, that means proving you can provide $100,000 of liability if you cause injuries or property damages to others. In Virginia, all you have to do is pay a $500 uninsured motorist fee. Every other state requires typical car insurance policies for all licensed drivers.

How to Get the Lowest Car Insurance Rates

Even if you live in Louisiana or Michigan, which have the highest car insurance rates, there are some ways to save money.

  1. Discounts: Ask your insurance agent for ways to save. We’ve seen discounts for everything from being a federal employee to driving an electric vehicle.
  2. Bundles: Do you have different types of insurance policies? Bundle them under one provider to save money.
  3. Deductibles: A higher deductible will mean a lower premium, but since how deductibles work is that you have to pay them before receiving any compensation, make sure it’s something you can afford.
  4. Limits: Lowering limits also lowers premiums, but again, make sure you have adequate coverage in the event of damages or injuries.
  5. Coverages: You can also drop coverages if need be. For example, you don’t need collision coverage on a car that doesn’t run, or liability coverage on a car in storage. To save the most, get minimum coverage.
  6. Companies: If all else fails, switching car insurance companies could give you lower rates. Learn how to find cheap car insurance companies.

Recap

As you can see, car insurance prices vary based on what state you live in. While you probably won’t want to move to a different state just to save money on car insurance, there are some other methods that don’t involve a moving van. For any other questions on your mind, check out our auto insurance FAQs.

Citations

  1. Background on: No-fault auto insurance. Insurance Information Institute. (2022).
    https://www.iii.org/article/background-on-no-fault-auto-insurance

  2. Women pay more on average than men for car insurance, despite getting into fewer accidents, study finds. CNBC. (2021, Apr).
    https://www.cnbc.com/2021/04/19/women-pay-more-than-men-for-car-insurance-in-21-states-study-finds.html