What state has the highest auto insurance rates?

The top five states with the highest auto insurance rates are (1) LA, (2) MI, (3) OK, (4) MT, and (5) CA. Louisiana has the highest auto insurance rate at $2,500/yr. or $208.33/mo. On average, drivers with a good record can expect to pay around $118/month in the U.S.

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Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates...

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance...

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Reviewed byDaniel Walker
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UPDATED: Apr 30, 2020

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Things to Remember...

  • After crunching the numbers the top five most expensive were Louisiana, Michigan, Oklahoma, Montana, and California
  • An SUV will cost more than a compact car, a brand-new car will cost more than a used one, and larger vehicles with lots of glass will be more costly than a small vehicle with a little glass
  • State regulations play an extremely important role in auto insurance prices because of their artificial influence of the market

In the world of auto insurance, one of the most common questions is regarding which state has the highest rates. Interestingly, you can do an Internet search on this question and find a lot of different answers.

But, before you begin to question that, realize that rankings by state are not always consistent because all of the factors involved change so rapidly.

  • Although you may be a fantastic driver you could be paying more for your car insurance than someone with a similar record could in another state
  • The average premium that Louisiana drivers pay is just over $2,500
  • The second highest state auto insurance premiums is Michigan, which on average, costs each driver approximately $2,098 annually
  • The reason that Oklahoma premiums are so high is it’s estimated that nearly one in four drivers in Oklahoma are operating cars that aren’t insured
  • Drivers in Maine pay the lowest car insurance premiums in the United States, which on average; run them just over $900 per year
  • Before you make any changes to your car insurance coverage, however, make sure to review your current policy and options carefully, to ensure that you make a decision that fits your budget and needs

You can get immediate free online auto insurance quotes by entering your zip code below!

A survey published by the Miami Herald last year ranked the states and their average insurance premiums by using a formula that included data on 2,400 different cars, compared in at least 10 zip codes per state, for every state and the District of Columbia.

After crunching the numbers the top five most expensive were Louisiana, Michigan, Oklahoma, Montana, and California. The bottom five included New Hampshire, Wisconsin, Ohio, and Vermont, and Maine.

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Don’t settle for being average or worse, expensive, no matter what state you live in. Be sure to shop around to find cheap auto insurance rates!

What kind of coverage are we talking about here?

In fairness, the survey considered the “average” auto insurance policy a typical American driver would have.

Being that most Americans take out loans to purchase their cars, a standard auto insurance policy includes state liability, collision, full glass, and fire & theft.

Understanding this explains why 47 states and the District of Columbia had rates in excess of $1,000. If all you’re going to purchase for your car is minimum state liability your policy will cost you significantly less.

It’s also important to note that cars of different styles and values were used in the study. It goes without saying that if you drive a BMW, your car insurance is going to be more expensive than someone who drives a VW.

An SUV will cost more than a compact car, a brand-new car will cost more than a used one, and larger vehicles with lots of glass will be more costly than a small vehicle with a little glass.

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How important is regulation in the equation?

State regulations play an extremely important role in auto insurance prices because of their artificial influence in the market. For example, a state that requires extremely high liability amounts may be justified in doing so because of population density.

Nonetheless, mandating higher liability limits will always result in higher auto insurance premiums. Someone has to pay for it, and it’s not going to be the insurance company.

Another thing to consider in terms of state regulation is taxes imposed on your insurance policy. If you look over your declarations pages you will probably never see the words “tax” or “taxes.”

That’s because the government is not foolish enough to put that line on your declarations pages. Instead, they use creative terms like “fees” and “surcharges.”

In a highly-taxed state like New Jersey, for example, state fees add a significant burden to the amount of insurance money we pay.

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Can insurance companies charge different rates in different states?

When people move from one state to the next they are often surprised at the difference in their auto insurance rates. This is especially true if the cost went up after they moved.

Unfortunately, your car insurance carrier has to take into account population density, the distance you travel to and from work, weather conditions, the safety record of the average driver in the state, and many other things.

Is there anything else at the state level that can influence auto insurance rates?

There are several other state-related factors, but none more important than the tort system.

In a “no-fault” state, each driver carries his own insurance policy which will cover him, his property, and his passengers in an accident. In no-fault states, jury awards tend to be very small by comparison.

On the other hand, fault-based states adopt an “every man for himself” mentality which makes lawsuits and high financial awards pretty common. As it turns out, fault-based states tend to pay more.

The one advantage you might have living in a fault-based state is that safe driving tends to be more rewarding.

In a no-fault state, litigation is kept at a minimum because parties in an accident tend to settle out of court. In this kind of system, whether you like or not, every auto insurance claim becomes a blemish on your record.

But in a fault-based state, each accident is investigated and fault assigned. The longer you can drive without an accident being blamed on you, the more trustworthy you become in the eyes of the insurance carrier.

To find auto insurance quotes in your states, enter your ZIP code in the search tool below!

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The Most Expensive States for Auto Insurance Rates

Although you may be a fantastic driver who pays their auto insurance premiums on time and has a spotless driving record, you could be paying more for your car insurance than someone with a similar record could in another state.

In fact, if you live in Louisiana, which in 2011 had the highest state auto insurance premiums in the United States, you might be paying more than a motorist in a state like Maine, whose driving record doesn’t compare to yours.

Find affordable car insurance in your state now by typing your ZIP code into the FREE quote tool above!

While being a reliable and safe driver, who pays their premiums on time, is a great way to keep your car insurance payments low, the reality is that what state you live in also has a substantial effect on the insurance rates you pay.

 Like it or not, insurance providers must also consider factors that are largely out of your control when they determine your car insurance premiums.

For example, they must consider what kind of traffic and weather conditions you’ll typically be driving in, what sort of insurance requirements your state mandates, or what taxes it imposes, amongst other considerations, which might make it more expensive to insure your car in that state opposed to another.

Remember, even though you might be a great driver, you could be more likely to get in a car accident while residing in one state than another.

Louisiana

According to a recent study, the average premium that Louisiana drivers pay is just over $2,500, which is approximately more than double what motorists on average pay in 16 other states.

While there are various reasons as to why car insurance premiums are so high in Louisiana, one of the contributing factors is reportedly the state’s judicial system, which tends to hand out large settlements in lawsuits stemming from car accidents.

As a result, insurance companies are forced to pay out more for damages and injuries, which in turn raises premiums for drivers.

In addition, due reportedly to Louisiana’s antiquated roadway system, injuries, and accidents are more common in the state, and thus, more insurance claims are filed.

Louisiana on average is less affluent than many other states, and as a result, many drivers do not have health insurance to cover their medical costs. Subsequently, more motorists who are harmed in car accidents must seek compensation through insurance policies and the court system.

Louisiana is also a state that is more prone to hurricanes than others are that may damage automobiles and the roads vehicles travel on.

Although these storms are not believed to be a major factor in why car insurance premiums are so high in Louisiana, they can result in large payouts for insurance providers.

For example, Hurricane Katrina in 2005 reportedly destroyed over 100,000 automobiles, and as a result, raised costs for several insurance companies significantly.

For more on car insurance requirements and driving regulations in the state, refer to the Louisiana Motor Vehicle Commission website.

Michigan

Second on the list for the highest state auto insurance premiums is Michigan, which on average, costs each driver approximately $2,098 annually in payments.

That means that although Michigan drivers pay around $1,000 more for car insurance annually than drivers in eight other states do, they pay approximately $400 less than their counterparts in Louisiana.

The key reason auto insurance premiums are so high in Michigan is due to the state’s laws, which guarantees unlimited personal injury protection payments to people who are injured in car accidents.

Insurance providers are required to pay up to approximately $470,000 in such payments when necessary before the state pays any remaining costs.

The state law mandates that victims can be compensated for life if circumstances warrant.

Personal injury protection insurance policies are more extensive than liability insurance, as depending on the coverage, they will provide financial compensation for medical expenses, lost wages, child expenses, and essential services.

Unlike liability insurance, PIP policies cover motorists and a passenger regardless of who is at fault for causing the accident.

Due to the broad, lengthy and potentially costly coverage PIP policies providers, insurance companies must charge higher premiums in Michigan as a result, to help offset the costs.

In addition, Michigan unemployment rates are among the highest in the country, which means that more people are not able to afford car insurance and as a result, more uninsured cars are on the road.

Insurance providers are in turn forced to charge higher premiums to make up for damages that normally would be met by liability insurance, which drivers are legally required to carry.

Michigan’s Department of State website provides information regarding the state’s assigned claims plan and Michigan’s rules for self-insurance.

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Oklahoma

Another state that ranks amongst the worst for expensive car insurance rates is Oklahoma, whose drivers on average pay nearly $1,900 annually in premiums.

While that’s several hundred dollars lower than what drivers typically pay in Louisiana, drivers in over 20 states pay approximately $500 to $1,000 less annually than motorists in Oklahoma.

One of the leading factors as to why auto insurance premiums are so high in the state is that according to the Insurance Research Council, it’s estimated that nearly one in four drivers in Oklahoma are operating cars that aren’t insured.

Although the government is attempting to crack down on uninsured drivers by increasing monitoring, insurance providers are forced to charge higher premiums due to the alarming number of uninsured cars.

In addition, Oklahoma is also prone to extreme weather and violent storms like tornadoes, which can quickly damage cars and damage road infrastructure by wind, hail, and flooding.

Through charging higher rates, insurance providers are attempting to offset extraordinary costs that they could incur from one or more storms taking place annually.

Drivers requiring more information about the state’s car insurance requirements and regulations should review the website for the Oklahoma Motor Vehicle Commission.

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Maine

While drivers in Louisiana, Michigan, and Oklahoma have to pay car insurance premiums that are in many cases, much higher than what their fellow citizens might pay in other states, residents in Maine typically pay much, much less.

Drivers in Maine pay the lowest car insurance premiums in the United States, which on average; run them just over $900 per year.

That’s almost, but not quite, nearly three times less than what drivers in Louisiana pay annually.

The general consensus as to why Maine offers the lowest auto insurance premiums is because of the state’s smaller size and reduced population, drivers enjoy much less traffic congestion, shorter commutes and less accidents as a result.

In addition, Maine has a thriving and competitive auto insurance industry, which offers consumers plenty of insurance options that helps keep rates down.

Unlike Louisiana or Oklahoma, who are more likely to incur extreme weather, Maine has been fortunate enough to avoid any natural disasters recently that can cause insurance rates to increase.

Maine’s Bureau of Motor Vehicles provides detailed information about the state’s car insurance requirements and corresponding regulations.

Geographical and Residential Considerations

As some of the above examples demonstrate, you may have to pay higher car insurance rates than drivers in other states, even if you have a similar or better driving record.

While all insurance providers consider your personal circumstances, whether you’re a safe driver, a reliable customer who pays their premiums, or what kind of car you drive, they must also factor in where you reside.

People, who drive in high volume traffic on a daily basis, commuting to and from work in an urban setting, are more likely to be involved in a car accident even if it’s not their fault.

In addition, crime rates in cities are typically higher than they are in rural settings, which also means that insurance providers will be forced to pay for more damages related to theft and vandalism.

In other words, if you live in a state that has larger cities and a higher population; the odds are that you will have to pay higher premiums than someone who lives in a region with minimal traffic and fewer people.

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Minimum Insurance Requirements

Another factor that insurance providers consider when determining the price of premiums are the car insurance requirements that each state has in place.

If a state mandates that lower levels of liability insurance are required for coverage, then in turn, the premiums will likely be less.

On the other hand, if a state requires drivers to have higher amounts of liability coverage, or more extensive insurance policies like comprehensive and personal injury protection insurance, then providers could face higher payouts.

In these states, such as Michigan, insurance companies will charge higher rates as a means to offset these costs.

Insurance and Relocating

If you plan to relocate to a new state, it might be wise to conduct some research ahead of time, to see if you will be paying less or more for car insurance in the future.

If you will be paying more to drive in a new state, you may be able to minimize these increases by determining what insurance provider offers the lowest rates.

Before you make any changes to your car insurance coverage, however, make sure to review your current policy and options carefully, to ensure that you make a decision that fits your budget and needs.

Compare car insurance rates in your state now by clicking here to enter your ZIP code into the FREE quote tool below!

References:

  1. https://www.goodfinancialcents.com/best-auto-insurance-companies/
  2. http://www.propertycasualty360.com/2015/11/19/20-auto-insurance-companies-ranked-from-worst-to-b?slreturn=1497622082
  3. http://www.startribune.com/entertainment/tv/139720433.html
  4. http://www.chicagotribune.com/classified/automotive/chi-car-insurance-myths-201112223-story.html
  5. http://www.iii.org/articles/how-do-i-choose-an-insurance-company.html

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Average Monthly Auto Insurance Rates by State
Average Monthly Auto Insurance Rates by State