Auto Insurance Rates by State

Automobile insurance rates vary by state and you may be surprised to learn of the state with the highest rate. Figures available for 2010 that rank all fifty states and Washington D.C. for the cost of car insurance, and the results are surprising. There are several factors that affect auto insurance rates including lawsuits and theft.

Find the lowest auto insurance rates available in your state today by simply entering you zip code into the quote box above!

States with Highest Automobile Insurance Rates

Find out what states have the highest auto insurance rates and why. Hopefully you are not living in one of these states, but if you are then it is very important for you especially, to compare auto insurance rates online.

Louisiana

It may shock you to hear that Louisiana has the highest automobile insurance rates for 2010 with an average cost of over $2,500 per year. Even more interesting is the reason why. The court system in Louisiana has judges that are elected rather than appointed. Many of these elected officials obtain their positions due to popularity, especially in the field of lawsuits.

In Louisiana a case cannot get a jury trial unless the amount of the settlement requested is more than $50,000. This state sees many lawsuits for $49,000 which is paid by insurance companies thus forcing the cost of auto insurance through the roof.

Michigan

The number 2 state is Michigan with an average just over $2,000 per year for automobile insurance. One of the reasons for the outrageous insurance premiums in Michigan is not due to theft but medical benefits. In Michigan it is possible to get unlimited medical benefits for life if a person has been in an auto accident. This is regardless of what type of auto insurance policy a person has. Michigan is the only state in the United States that offers this type of coverage.

With this system a person’s insurance covers the first $460,000 and then any medical coverage comes from a statewide pool called the Michigan Catastrophic Claims Association. This statewide pool drives the cost of auto insurance up for everyone living and driving in the state of Michigan. Because of this type of personal injury protection or PIP insurance, car insurance has become the number one source of health insurance or medical coverage in the state.

Factor in the unemployment rate in Michigan, which is currently around 15% and the highest of any state in the United States, and people allowing their insurance policies on their cars to lapse due to a lack of funds and you have a recipe for disaster. Not having car insurance can mean jail time because Michigan has a mandatory auto insurance law, as most states in the union do.

2011 Averages

Figures for 2011 so far reveal Michigan has surpassed Louisiana but only by dollars for the cost of car insurance. Nearly 17% of all drivers in Michigan drive without auto insurance. The cost of these uninsured drivers in the case of an accident falls on the state and this drives up insurance rates.

Rounding out the top five states with highest auto insurance premiums are Oklahoma in 3rd, Montana in 4th and Washington D.C. in 5th. All of these states have insurance premiums over $2,000 per year which is over two times as expensive as the cheapest state which is Vermont.

Mississippi

Mississippi is currently ranked 7th for 2011 in most expensive states and was 21st in 2010. The Mississippi Senate passed house bill 620 which states “uninsured drivers could face various penalties under the new legislation, including a suspended driver’s license and a fine of up to $500. The bill also gives tax assessors and collectors the authority to deny vehicle license plates to motorists who are uninsured.”

This bill is currently on the Governor’s desk and is a heavy blow to the working people living in this state. Mississippi is the state with the nation’s lowest per person income at just $31,186 per year. This average is just slightly over ¾ of the national average.

States with the Lowest Insurance Premiums

Vermont is considered the best state to get auto insurance in because it’s the cheapest in 2011. In 2010 only Maine was cheaper than Vermont. Persons living in Vermont can expect to pay just over $900 per year in auto insurance. Maine is only a few dollars higher.

Chris Condon is the president of the Maine Insurance Agents Association. He states that Maine is a proud state and people living in Maine “tend to seek fair treatment rather than big money.” Other factors that keep the costs of insurance low in Maine is the low total population. A lower population means less accidents and less driving overall. Less people means less insurance claims which means lower overall insurance rates.

Vermont and Ohio are the only other states with insurance premiums averaging less than $1,000 per year. These states attribute their low annual insurance premiums to low total populations as well as higher average ages for the state.

Most Frequent Autos Stolen in the U.S.

Another reason automobile insurance premiums are high is auto theft. If the population in a state tends to drive vehicles that are frequently stolen insurance premiums overall are going to be higher to cover the cost of these vehicles. Forbes.com released a list late in 2010 of the most stolen vehicles in the United States. Topping the list is the Cadillac Escalade, especially those made from 2007 to 2009. Average losses from Escalades alone make up more than 7 times the average. Almost one quarter of all Escalade claims are over $40,000.

Other vehicles that are frequently stolen are the Ford F-250 crew cab, Nissan Pathfinder Armada and the H2 Hummer 4WD. All luxury SUV’s have the highest theft in proportion to their worth. Forbes.com reports that “the value of their loss is more than six times as high as the average for all passenger vehicles.”

Vehicles that are used for work such as trucks are attractive to thieves not only because of the horsepower but because these vehicles normally have tools and other work related materials inside. It’s like a two for one for thieves.

What this Means for You

Every state has minimum mandatory auto insurance laws but each state’s insurance rates vary greatly. While Louisiana has the highest premiums due to lawsuits, Michigan will soon surpass Louisiana as the most expensive state in which to insure your vehicle with its medical coverage for life. Lower total population numbers, less lawsuits and more insured drivers keep premiums low in states like Vermont and Maine. Theft will affect an individual’s premium and in states where many of the most popular vehicles are stolen such as Texas, premiums will tend to rise with the amount of the trucks and luxury SUV’s sold.

No matter if you live in the cheapest or the most expensive states in the nation, saving money on auto insurance is always beneficial. Find the best auto insurance policy for your vehicle by entering you zip code below!