States with the Most Expensive vs. Cheapest Car Insurance Rates

Published: Wed 14 Apr 2010

Larry Roth

According to a new study by Insure.com, Maine has the lowest auto insurance rates, while Louisiana has the highest car insurance premiums.

The results of the study were obtained from the average car insurance rates for over 2,400 cars in ten ZIP codes per state from six of the country's biggest car insurance providers.

With an average auto insurance premium of $2,510.87, Louisiana takes the cake for highest insurance rates. The explanation, according to Insure.com, is a combination of the state's poor roads and court system.

Insure.com writes: "In Louisiana, only cases with claims in excess of $50,000 receive a jury trial. That sweetens the pot for seeking a claim against an at-fault driver - and insurance companies pay the tab." Richard Clements, a former president of the Independent Insurance Agents of Greater New Orleans, explains to Insure.com that in these cases, state judges usually favor people's claims over the facts of the case because they are elected, not appointed.

Michigan Has Second Highest Rates in the Nation

Coming in right behind Louisiana for high car insurance rates is Michigan, where the average car insurance premium is $2,098.29. These exorbitant rates, says Insure.com, are the result of the state's medical law as well as a devastating unemployment rate. When the employment rate goes up, more drivers choose to go uninsured.

"Unlike any other state, it offers unlimited medical benefits for the life of accident victims - no matter what policy they buy," explains Insure.com. "Under the system, an individual's insurance carrier covers the first $460,000 in benefits. Above that amount, a statewide pool (called the Michigan Catastrophic Claims Assessment) kicks in, which affects the rates of everyone in the state."

Maine Has the Cheapest Auto Insurance Rates

Maine, however, faces no such problems. Drivers there pay just $902.85 on average per year for car insurance coverage, which is the lowest average rate in the nation.

Maine's low insurance premiums are the result of several factors. First, the state has a tiny population. With fewer people on the roads, the streets are less congested, and accident claims are few. Moreover, Maine has at least 30 auto insurance companies that compete for the business of its residents, which drives up competition and keeps down prices.

Ten Most Expensive States for Car Insurance

1. Louisiana: $2,510.87
2. Michigan: $2,098.29
3. Oklahoma: $1,869.39
4. Montana: $1,857.96
5. California: $1,774.41
6. South Dakota: $1,772.83
7. Washington, D.C.: $1,753.19
8. Georgia: $1,751.42
9. Illinois: $1,679.15
10. Connecticut: $1,678.90

Ten Least Expensive States for Car Insurance

1. Maine: $902.85
2. Vermont: $968.58
3. Ohio: $999.86
4. Wisconsin: $1,010.93
5. New Hampshire: $1,011.23
6. Iowa: $1,039.04
7. Massachusetts: $1,043.80
8. North Carolina: $1,130.45
9. Arizona: $1,152.50
10. Tennessee: $1,170.12