Car insurance by state: Car insurance rates vary significantly across the United States, influenced by a range of factors, including state-specific regulations, local risks, and insurance requirements. Understanding how car insurance costs differ by state can help drivers make informed decisions about their coverage and budget.
This guide provides an overview of car insurance rates by state, highlighting the most and least expensive states and offering insights into factors that contribute to these variations. Whether you’re relocating or simply looking to compare rates, this information is essential for finding the best insurance options for your needs.
Why Does Location Affect the Cost of Car Insurance?
The cost of car insurance can vary significantly depending on where you live. Several factors related to your location play a crucial role in determining your insurance premiums. Here are some common reasons why location matters:
State Car Insurance Requirements and Coverage Limits
Each state sets its own rules for minimum car insurance coverage and limits. Some states only require liability insurance, which covers bodily injury and property damage you may cause to others in an accident. Others require additional coverages, such as uninsured motorist coverage, medical payments (MedPay), or personal injury protection (PIP).
States that mandate more coverage types, especially PIP, tend to have higher insurance costs. For example, states like Florida, Michigan, New Jersey, New York, and Delaware, which require PIP, often have some of the highest insurance rates.
Auto Insurance Claims in Your State
The frequency and severity of auto insurance claims in your state can impact your premiums. States with a high number of claims, especially those involving severe weather or high accident rates, typically see higher insurance costs.
- Severe Weather: States prone to severe weather events, such as hurricanes, hail, and flooding, often have higher insurance rates. For example, Florida, with its frequent hurricanes, has higher average insurance costs compared to a state like Ohio, which experiences milder weather.
- Urban vs. Rural: Urban areas with heavy traffic and congestion generally see more accidents, leading to higher insurance costs. For instance, Connecticut, a predominantly urban state, has higher insurance rates than Iowa, which is mostly rural.
- High-Crime Areas: States or regions with higher rates of car theft or vandalism also see higher insurance premiums due to the increased risk for insurance companies.
Cost of Insurance Claims
The cost of repairing vehicles and medical care after an accident varies by state, affecting insurance premiums.
- Car Repair Costs: States with higher labour and parts costs for car repairs or replacement vehicles tend to have higher insurance rates.
- Medical Costs: States with higher medical expenses can also see higher insurance premiums due to the increased cost of settling claims.
Legal Environment and Frequency of Lawsuits
States with higher rates of lawsuits related to car accidents often have higher insurance premiums. Lawsuits can lead to larger settlements, increasing the overall cost for insurance companies.
For instance, Louisiana, known for a higher frequency of bodily injury claims and lawsuits, has one of the highest average annual insurance costs in the country.
Read Also: Best Car Insurance for Seniors
State Minimum Requirements for Auto Insurance
Each state has specific minimum insurance requirements that drivers must meet. Common types of required coverage include:
- Liability Insurance: Covers injuries and damages you cause to others in an accident. Limits are often shown as three numbers (e.g., 25/50/25), representing the maximum payout for bodily injury per person, bodily injury per accident, and property damage per accident.
- Uninsured Motorist Insurance: Covers your injuries and damages if you’re hit by an uninsured driver. Some states also require underinsured motorist coverage.
- Personal Injury Protection (PIP) or Medical Payments: PIP covers medical expenses, lost wages, and other related costs, regardless of fault, and is mandatory in some states. MedPay is similar but generally offers lower limits and fewer benefits.
Understanding your state’s requirements and how various factors influence insurance costs can help you make informed decisions about your car insurance policy.
Average Car Insurance Costs by State
| State | Average Annual Cost for Full Coverage | Average Annual Cost for Minimum Coverage |
| Alabama | $1,809 | $526 |
| Arkansas | $2,061 | $581 |
| Alaska | $2,323 | $414 |
| California | $2,462 | $764 |
| Colorado | $2,489 | $516 |
| Connecticut | $1,730 | $846 |
| Delaware | $2,462 | $936 |
| Florida | $4,326 | $1,286 |
| Georgia | $2,181 | $720 |
Minimum Car Insurance Requirements by State
| State | Liability Requirements | Uninsured Motorist Bodily Injury (UMBI) | Protection (PIP) Or Medical Payments Coverage |
| Alabama | 25/50/25 | Not required | Not required |
| Alaska | 50/100/25 | Not required | Not required |
| Arizona | 25/50/15 | Not required | Not required |
| Arkansas | 25/50/25 | Not required | Not required |
| California | 15/30/5 | Not required | Not required |
| Georgia | 25/50/25 | Not required | Not required |
| Delaware | 25/50/10 | Not required | PIP
$15,000 Per person $30, 000 per accident |
Which States have the Most Expensive Car Insurance
New York, Florida, Louisiana, Pennsylvania, and Maryland are known for having some of the most expensive car insurance rates in the United States. If you reside in one of these states, you can expect to pay higher premiums compared to other areas of the country. These higher costs are influenced by various factors, including state insurance requirements, the frequency of claims, legal environments, and other regional considerations that drive up the cost of car insurance.
| State | Average Annual Car Insurance Cost | Average Monthly Car Insurance Cost |
| Florida | $4,326 | $361 |
| Louisiana | $3,629 | $302 |
| New York | $4,769 | $397 |
| Maryland | $3,349 | $279 |
| Pennsylvania | $3,600 | $300 |
| Colorado | $2,489 | $207 |
| Texas | $2,938 | $245 |
| Nevada | $3,342 | $279 |
| Michigan | $2,995 | $250 |
| Rhode Island | $2,715 | $226 |
New York: The average car insurance cost in New York is $4,769, which is 125% higher than the national average of $2,118.
Factors Influencing High Insurance Rates
- Large Urban Areas: States with large urban populations often have higher rates of car accidents and claims due to congested traffic conditions. For example, New York, Florida, Pennsylvania, Maryland, and Rhode Island are among the states with the highest population densities, which contributes to more frequent accidents and, consequently, higher insurance rates.
- No-Fault Laws and Fraud: States like Florida, Michigan, New York, and Pennsylvania operate under no-fault insurance laws, where each driver’s insurance covers their own injuries and damages regardless of fault. These laws often lead to higher rates of fraud, as claims can be filed more easily, driving up insurance costs.
- Litigation: States such as Louisiana and New York have higher-than-average numbers of car insurance lawsuits. A litigious environment can lead to larger settlements, increasing overall costs for insurers and, subsequently, for policyholders.
- Severe Weather: Florida and Louisiana are particularly vulnerable to severe weather events, such as hurricanes, which can cause extensive damage to vehicles. The high cost of claims resulting from these events often leads to increased insurance premiums.
States with the Cheapest Insurance Rate
| State | Average Annual Car Insurance Cost | Average Monthly Car Insurance Cost |
| Idaho | $1,021 | $85 |
| Maine | $1,216 | $101 |
| Vermont | $1,037 | $86 |
| Lowa | $1,238 | $103 |
| Indiana | $1,454 | $121 |
| Wyoming | $1,341 | $112 |
| North Carolina | $1,307 | $109 |
| New Hampshire | $1,411 | $118 |
| North Dakota | $1,319 | $110 |
| Ohio | $1,112 | $93 |
Liability Insurance Requirements
Every state requires drivers to have liability insurance, which covers damages to others in the event of an accident. However, the specific requirements and optional coverages can vary by state, impacting insurance costs.
States Without Mandatory Insurance
- New Hampshire: Drivers are not required to carry car insurance but must show they can meet financial responsibility requirements if they cause an accident. Purchasing insurance is the most straightforward way to comply.
- Virginia: Drivers can opt out of car insurance by paying an uninsured motor vehicle fee of $500. However, this fee does not cover damages in an accident, making insurance a crucial safeguard.
Unique State Requirements
- Michigan: Requires property protection insurance, which covers damages to stationary objects, like buildings and fences, up to $1 million.
- No-Fault Insurance States: Twelve states, including Florida and New York, require personal injury protection (PIP) as part of their no-fault insurance laws. PIP covers medical expenses, lost wages, and more, regardless of fault.
Differences Between No-Fault and Fault States
- No-Fault States: Drivers must first use their PIP coverage for injury-related expenses, limiting the ability to sue the at-fault driver. States like Florida, Michigan, and New York follow this model.
- Fault States: Allow for claims against the at-fault driver’s insurance and do not require PIP coverage. Most states fall into this category.
Factors Affecting Car Insurance Rates
Location-Based Factors
- Urban Density: High population density can lead to more accidents, increasing insurance costs. States like New York and Florida see higher rates due to their large urban areas.
- Weather: Severe weather events, like hurricanes in Florida and Louisiana, result in high insurance claims and, subsequently, higher premiums.
- Legal Environment: States with high litigation rates, such as Louisiana, often see higher insurance costs due to larger settlements.
Insurance Coverage and Cost Trends
- Rate Increases: Factors such as inflation, higher repair costs, and frequent natural disasters can lead to rising insurance premiums. Car insurance companies may adjust rates annually, reflecting changes in risk factors.
Changing Insurance When Moving
- Out-of-State Moves: If you move, you must inform your insurance company to adjust your policy according to the new state’s requirements. This is also a good time to compare rates from different insurers.
Personal Factors Influencing Insurance Rates
- Driving Record: A clean driving record usually results in lower premiums, while accidents or violations increase costs.
- Age and Experience: Younger, inexperienced drivers generally pay more for insurance. Some states, like Hawaii, do not allow age to be a factor in determining rates.
- Gender and Marital Status: Gender and marital status can influence rates, with young males typically paying more. Married individuals often receive lower rates.
- Vehicle Type: The make and model of your car affect your insurance costs, particularly for comprehensive and collision coverage.
- Coverage Choices: Higher coverage limits and additional protections, like comprehensive coverage, increase insurance costs.
- Deductibles: Choosing a higher deductible can lower your premium, but you’ll pay more out-of-pocket if you file a claim.
- Insurance History: Continuous coverage without gaps can lead to lower rates, while lapses or a new policy may increase costs.
- Claims and Credit History: A history of claims or poor credit can lead to higher premiums
Which state has the highest car insurance rates?
New York has the highest average car insurance rates in the U.S.
How much is car insurance in the States?
The national average car insurance cost is approximately $2,118 per year.
Is car insurance cheaper in Texas or Florida?
Car insurance is generally cheaper in Texas compared to Florida.
How much is car insurance in California per month?
The average car insurance cost in California is around $150 per month.
Top 10 states with highest car insurance
- New York
- Florida
- Louisiana
- Pennsylvania
- Maryland
- New Jersey
- Michigan
- Rhode Island
- Delaware
- Connecticut
Top 10 states with the lowest car insurance
- Maine
- New Hampshire
- Vermont
- Ohio
- Wisconsin
- Idaho
- Iowa
- Nebraska
- South Dakota
- Montana
Cheapest car insurance by state?
Maine consistently has the cheapest car insurance rates in the U.S.
Best car insurance by state?
The best car insurance varies by state but generally includes companies with high customer satisfaction and good coverage options, like State Farm and GEICO.
Home insurance by state?
Home insurance rates vary widely; typically, Mississippi and Louisiana have some of the highest rates due to severe weather risks.
Highest car insurance rates by city?
Detroit, MI and Miami, FL, are known for having some of the highest car insurance rates by city.
How much is car insurance per month?
The average monthly car insurance cost in the U.S. is about $176.
GEICO car insurance quote?
GEICO offers competitive rates, and quotes vary based on individual factors. On average, you might expect to pay around $100 to $150 per month.
