2022 Top 14 Cheapest States for Car Insurance
Car insurance is expensive. If you don’t have a lot of money to spend on it, this can be frustrating. Fortunately, some states have lower premiums than others.
One of the most significant financial decisions a person can make in their life is purchasing a new or new-to-you automobile. However, buying a piece of metal on wheels for tens of thousands of dollars is just the start of what can frequently be a protracted and expensive ownership experience.
When you are looking for the cheapest car insurance rates in your area, it can be hard to know where to start. Fortunately, we have done the research and compiled this list of the 14 cheapest states to insure a car.
You can use our list to find the cheapest car insurance in your area and compare rates on a state-by-state basis. You can also use this information to decide if it makes sense to shop around or if you should stick with one company.
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One of the most expensive ongoing expenses associated with automobile ownership is car insurance. It is a legal requirement in most areas. Although you hope you’ll never need it, if you do, you’ll be far better off than if you didn’t have insurance. The costs may astound those who are looking for insurance for the first time.
The truth is that a wide range of factors influence how much insurance costs and how much it costs for every policy. Your age, gender, driving history, amount of coverage, credit score, and the type of vehicle you drive are some of the factors that are personal to you or under your control. You do not influence other aspects, such as state insurance coverage laws and requirements from lenders and leasing firms.
The average annual cost of car insurance varies by state, but it is generally fair to say that the cheapest states tend to be those with high population densities and low crime rates.
What is Car Insurance?
Car insurance is the financial responsibility that protects you against the cost of damage or injury to your car and its parts, including bodily injury and property damage. When you buy car insurance, you’re paying for protection in case of an accident.
Car insurance is a necessity for anyone who owns a motor vehicle because it protects you financially in case of an accident or theft. Most states require all drivers to have some form of auto insurance before getting a license.
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This may be optional, but it’s extremely unlikely that you’ll be able to purchase car insurance without having passed driver’s education.
Video: Cheapest states for insurance
Where you reside has a significant impact on how much you’ll pay as well. State-to-state insurance prices might differ by hundreds of dollars. According to the most current survey on auto insurance rates by U.S. News & World Report, the average representative rate in the most costly state is around three times that of the least expensive state.
Which States Have the Cheapest Car Insurance?
Maine offers the lowest representative pricing across the vast range of consumer characteristics included in our study, according to our thorough review of auto insurance rates. Our profiles in Maine spend $865 on average a year for insurance.
Here are 14 of the cheapest states for car insurance:
- Maine $865
- New Hampshire $870
- Ohio $886
- Virginia $991
- Wisconsin $998
- Idaho $1,010
- North Carolina $1,018
- Vermont $1,063
- Indiana $1,068
- Lowa $1,071
- Hawaii $1,206
- Massachusetts $1,296
- Washington $1,313
- Utah $1,449
Why Maine Auto Insurance Is So Cheap
Maine maintains low average insurance premiums despite having substantially greater minimum insurance requirements than many other states. This is due to the fact that just 4.5 percent of drivers in Maine lack insurance, which is the lowest number in the country. Their cheap annual premiums are also a result of their low rates of car theft and fatal accidents as a whole.
What Makes Car Insurance Rates Vary From State to State?
There are several factors at play when determining whether vehicle insurance rates are higher or lower in various states (and regions within states). Some of the main causes of differing rates are legal requirements, traffic congestion, economic situations, weather, and competition.
Various states have various insurance coverage requirements, and others don’t even have any. In such states, different coverage requirements result in either higher or lower rates. According to our data, Michigan, for instance, has the highest rates in the nation, mostly because it mandates unrestricted medical care to cover collision injuries.
States (and regions within states) with high rates of unemployment, poor salaries, or poverty might anticipate paying more for insurance than more affluent regions. In addition to the fact that crime tends to be greater in impoverished neighborhoods, more drivers are probably uninsured or underinsured as well. The financial burden of their accidents is carried by other drivers who have insurance, whether they can afford it or not.
Consumers in metropolitan locations may often anticipate paying higher insurance premiums than those in rural areas, as increasing traffic congestion raises the risk of crashes. Car burglaries, theft, and vandalism are also more common in urban settings. States with lower population densities see reduced insurance premiums as a result of these variables. Customers who get auto insurance inside a state should anticipate paying much less than those who do so in urban regions.
Customers of car insurance are in a wonderful position to experience cheaper yearly average car insurance rates in states where there is a lot of competition among vehicle insurers than they are in regions where there are just a few businesses competing. The District of Columbia and all 50 states do not have all insurance providers operating there.
Car insurance rates are likely to be higher for drivers in areas with a history of severe weather than for those who live in drier regions. The costs of these catastrophes are reflected in insurance prices in states like Louisiana, which routinely experience both minor and large floods as well as the effects of hurricanes. In Michigan, the expense of winter weather and its effects on the roadways contribute to high insurance prices by causing car damage. Hail damage increases the cost of comprehensive vehicle insurance coverage in the central United States.
States with warmer climates may have lower rates since there is less likelihood of adverse weather and hazardous driving conditions.
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How much do Americans pay for Car insurance?
Instead of average premiums, the true cost rankings are based on the average total proportion of income used for auto insurance. The real cost of auto insurance increases with ranking.
On a national level, drivers pay 2.57 percent of their income on auto insurance. Drivers spend a different proportion in different regions than the national average, depending on the location.
With 5.26 percent of their income, Louisianan drivers spend the most on vehicle insurance, followed by Floridians at 4.42 percent. And among the metro regions examined, residents of Tampa and Miami devote the biggest percentages of their income to vehicle insurance, spending, respectively, 4.49 percent and 5.58 percent of their yearly income on coverage.
The fact that storms and flooding occur often in certain states may contribute to their high genuine cost of living. Residents wind up spending a sizable amount of their income on auto insurance due to the comparatively low median earnings in both states.
Your auto insurance rate is influenced by a variety of factors, not just where you live. Your premiums and the percentage of your income that you spend on auto insurance are often impacted by life events including a change in your credit score (in most states), driving record, and adding a youngster to your policy.
Which US states don’t require car insurance?
New Hampshire and Alaska:
According to the Insurance Information Institute and the Property Casualty Insurers Association of America, New Hampshire is the only state that does not require its residents to carry insurance or prove that they can cover their liability in the event of an accident.
However, if you cause an accident, the state requires you to show that you have insurance or that you can pay for treatment of injuries up to $50,000 and compensation for property damage up to $25,000. Otherwise, you risk having your license and registration withdrawn. Drivers can meet this requirement by posting a bond, money, or securities with the state treasurer or otherwise demonstrating that they can meet the state’s requirements.
The state’s “Live Free or Die” law may also require proof of financial responsibility for at least three years after being convicted of a traffic crash, driving under the influence of alcohol, failure to stop and report a traffic crash, committing homicide or assault, or receiving a second ticket for speeding or reckless driving.
Alaska exempts certain residents who live in areas not connected by land to the state highway system or with a road with an average number of vehicles per day greater than 499 from the requirement to purchase automobile insurance. The exemption currently applies to residents in 294 localities, including islands, cities, and towns. However, these drivers must take out car insurance if they have committed a serious traffic offense within the last five years.
Is it good to drive without Car insurance?
Most people spend more on insurance than they ever do on claims. Insurance businesses would cease to exist if that weren’t the case. But that does not imply that driving without insurance is a wise choice. If you reside in one of the aforementioned states and you are thinking of forgoing insurance, bear the following things in mind:
- Do you have enough cash to buy a bond? Every state, except New Hampshire, requires a substantial cash deposit in place of insurance.
- Do you spend your money on more worthwhile items? Even if you have the money, it might not be the greatest use of it to put it in a bond or deposit solely to avoid making vehicle insurance payments. For example, you could do better by saving for retirement.
- Are you able to bear the risk? Even if you can afford the loss, it’s still a great risk to cause even one mishap that results in substantial damage or injury to many people’s finances.
What states have the highest car insurance rates?
With an average yearly premium of $4,003, Michigan has the highest rates in the US, making insurance there 579.63 percent more costly than in Maine. These figures depend on a lot of variables, such as whether the drivers had complete insurance coverage.
10 Most Expensive States For Car Insurance
- Rhode Island
- New York
Cheap car insurance companies
- State Farm
- Erie Insurance
Cheapest States for Car Insurance Frequently Asked Questions
Who has the cheapest car insurance?
Geico offers the least average vehicle insurance prices among the biggest insurance providers in the country. However, rates differ significantly from person to person depending on things like gender, the vehicle you drive, and your area. Once a year, check the costs of auto insurance from at least three different insurers to get the best deal.
Why is Geico so much cheaper?
Geico sells insurance directly to customers and provides several discounts, which is why it is so inexpensive. Compared to firms like State Farm and Allstate, Geico has a lot fewer regional offices and agents and the offer direct-to-consumer insurance sales, which also saves the company money on intermediaries.
Why is Florida so expensive?
Due to the presence of major corporations, Florida is pricey. Since many of these businesses have their headquarters in Florida, living expenses and business expenses are higher there. Florida’s high cost of living is a result of the state’s average pay being greater than the national average.
Which US states don’t require car insurance?
New Hampshire and Alaska
According to the Insurance Information Institute and the Property Casualty Insurers Association of America, New Hampshire is the only state that doesn’t require people to obtain insurance or even demonstrate that they could pay their liabilities in an accident.
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Who is cheaper Progressive or GEICO?
Drivers all throughout the nation may get affordable auto insurance from Geico and Progressive. Although Progressive normally provides better rates to drivers with recent DUIs, at-fault accidents, or speeding tickets on their records, Geico’s premiums are often cheaper overall.
Is car insurance cheaper in South Carolina than Florida
The cost of car insurance is often lower in Florida than South Carolina, however the difference is negligible. Despite having lower minimum coverage requirements, Florida’s auto insurance premiums are typically $4 annually less expensive than South Carolina’s.
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