Car insurance premiums are personalized to each individual based on a variety of criteria. However, your location is one of the biggest factors that will affect your rate. The average cost of car insurance is cheaper in certain states because of location-specific factors – like weather risks, the number of uninsured drivers on the road, and the population density.
In this guide, we’ll look at the top 10 cheapest states for car insurance and explain why some states have less expensive auto insurance than others.
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Certain states have more affordable car insurance rates than others. According to our data, the least expensive car insurance states include Vermont, Idaho, and Maine. These states have average rates that are well below the U.S. national average of $1,824 per year for full coverage.
Understanding the average cost of auto insurance in your location can give you an idea of what you might pay for coverage. However, it’s still a good idea to get personalized rate quotes from several insurers to find the cheapest policy.
You can compare insurance rates near you using our comparison tool and find the most affordable policy for your location and situation.
Based on our analysis of available rate data, Wyoming has the cheapest auto insurance in the U.S. The average full coverage insurance premium in Vermont is $1,140 per year, which is about 52% less than the U.S. national average rate of $1,824 per year.
Location has a significant impact on the cost of your car insurance. Some of the most affordable states for car insurance are Wyoming, Vermont, Maine, Idaho, Hawaii, and Ohio. Below, you can see the top 10 states with the cheapest car insurance and their average annual rates for a full coverage policy:
Wyoming is the cheapest state for auto insurance with an average annual premium of $1,140 per year. There are many reasons why car insurance in Wyoming tends to be so inexpensive compared to other states. Reasons may include its low population density, fewer urban areas, minimal traffic congestion, favorable state regulations, and beneficial competition among insurers.
Vermont is the second-cheapest state for auto insurance with an average annual premium of $1,237 per year. One of the reasons why Vermont has cheap car insurance is because it has a very low population density. It’s also largely rural, which contributes to low car insurance rates. With few drivers on the road at any given time, the risk of an accident goes down, and so does the average cost of car insurance in the state.
Maine is the third-cheapest state for auto insurance, with an average annual premium of $1,255. Maine is a mostly rural state and it has very few uninsured drivers. According to the Insurance Information Institute (Triple-I), just about 5% of Maine drivers are uninsured. Only a few states have fewer uninsured drivers than Maine. However, the average cost of car insurance might be higher in Maine’s urban areas, such as Portland and Bangor.
Idaho is the fourth-cheapest state for car insurance. The average premium in Idaho is $1,362 per year. Like Vermont, Idaho is mostly rural, which corresponds to lower auto insurance costs. In addition, Idaho does not experience many extreme weather events which can potentially damage insured vehicles. When insurance companies aren’t dealing with frequent claims, the cost of auto insurance is often more affordable for drivers in the area.
Car insurance companies consider a variety of factors to calculate car insurance rates in a specific location. For example, the population density, the number of uninsured drivers, and the number of accidents in the area are just a few of the criteria that can contribute to the cost of car insurance.
Auto insurance companies also consider the number of claims that drivers file in specific locations. For instance, if thousands of drivers start filing vehicle theft claims, insurance companies might raise rates for drivers in that state. Similarly, if drivers continuously file weather-related claims in a certain state, rates might go up due to increased damage risks.
The amount of car insurance that is required in the state can also affect the average premium. In states that have low minimum coverage requirements, car insurance rates can be more affordable. Conversely, in states that have higher coverage requirements, car insurance premiums can be more expensive.
Keep in mind that the average cost of car insurance isn’t just determined by your state. Insurance companies also look at your city and ZIP code when calculating your personalized rate. Even if you live in a state with low car insurance rates, you could pay more than the statewide average based on your specific location.
Wyoming is currently the least expensive state for car insurance in the U.S. The average full coverage premium in Wyoming is $1,140 per year or about $95 per month. Other states with affordable car insurance include Vermont, Idaho, Maine, and Ohio.
The most expensive state for car insurance is New York. The average premium in New York is about 50% more expensive than the U.S. national average rate. Other states with expensive car insurance include Louisiana, Florida, Delaware, and New Jersey.
There isn’t a single cheapest car insurance company for every driver. Car insurance companies charge different rates, even for the same type of coverage. Additionally, your premium is based on unique factors, like your age, credit score, driving record, vehicle type, and deductible. The best way to find the cheapest car insurance company for you is to compare rates from several insurance providers.
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