Cheapest States for Car Insurance

Just because you live in one of the cheapest states for car insurance, doesn't mean you are getting the best rate possible. Take control of your financial future and compare multiple rates to ensure your car insurance plan is the best policy available. Each state has its own set of guidelines regarding car insurance. Some require minimum amounts of liability protection while some only require drivers to prove they are financially able to pay reasonable claims made against them. Take the time to familiarize yourself with not only with your state's specific requirements, but also with the many ways, you can reduce your policy premiums.

Least expensive states for car insurance

Each year, the National Association of Insurance Commissioners (NAIC) compiles a list of the most and least expensive states to insure a vehicle in. Comprised solely of the amount an individual driver spends on car insurance, this list does not represent the amount of medical, collision, or liability claims made in each state. This is because not all states require drivers to carry these forms of insurance protection.

A state with a healthy economy is more likely to have expensive insurance rates. When a state's economy is robust, consumers are more likely to purchase new automobiles, which require additional coverage such as collision (protection from accidents) and comprehensive (protection from theft, vandalism, and physical damage to your vehicle). It is also important to note, that drivers who live in states with dense metropolitan areas pay more than states with predominately-rural areas do. The following states have the least expensive yearly car insurance costs.

 

As a basis on comparison, New Jersey is the most expensive state to insure a car in with a yearly cost of $1,184.

The five least expensive cities are:

 

Minimum coverage

Each state has a minimum amount of insurance that a driver must possess. Most states require somewhere in the range of 25/50/10. The first number in this set represents a maximum of $25,000 worth of bodily injury protection for one driver involved in an accident. The second number represents a maximum of $50,000 worth of liability for all parties injured in the accident. Finally, the last number represents a maximum of $10,000 of property damage protection. As you begin to research and compare insurance quotes, be sure to understand your state's specific requirements. It may also be in your best interest to purchase additional coverage if you have a new car, or drive in a densely populated area.

Uninsured motorist protection

Not included into the comparison of the most and least expensive states for car insurance is uninsured motorist protection. This form of insurance protects drivers from uninsured or underinsured drivers. Talk with an insurance professional to determine if the cost of uninsured motorist protection outweighs the risk of not carrying additional coverage.

No fault states

There are 12 states in the union that employ a no fault system of car insurance. In the event of an accident, drivers are not determined to be at fault. Developed to prevent unnecessary litigation as well as to prevent delayed insurance payments, no fault insurance requires driver to possess a minimum amount of liability protection to cover necessary costs relating to potential accidents. There are of course exceptions to the rule, as litigation is often unavoidable in serious collisions.

Overall, states that choose the no fault system, are not any more or less expensive to insure a car in than states that determine fault. Rather, it is the amount that insurance companies pay out, that determines the state's average insurance premiums.


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