New Study: Auto Insurance Rates by State
When it comes to driving in the United States, car insurance is not only recommended but required. Every state but New Hampshire requires you to carry a mandated minimum level of coverage – and experts recommend you carry up to 10 times more than that.
To find out how to get the best rates on car insurance, MoneyGeek.com crunched car insurance data provided by Quadrant Information Services from an average of five leading insurers in each of the 50 states and the District of Columbia. In this robust state-by-state guide, you can compare car insurance premiums from the leading carriers in your state, find out the best ways to cut costs when your teen starts driving and learn where your state stands in terms of road safety.
Select Your State:
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Test Yourself: Which of These Tactics Really Save Money on Car Insurance?
Consumer Reports, in a recent special report published online, provided some insight into the false assumptions consumers have about how to save money when they buy car insurance. Take the test below to see how much you know.
If you’re a safe driver who’s never had an accident, you’ll get the best rate since insurance companies base your premium almost exclusively on your driving risk. True or false?
Insurance companies may consider your credit history, consumer spending history, marital status, occupation, and other things that have nothing to do with driving risk. In states that allow it, they will even charge you more if they think you are unlikely to hunt for bargains.
By bundling your home and auto policy, you can save money. True or false?
Many insurance companies will offer discounts when you bundle your policy. In some instances, this be as much as 30 percent. Consumer Reports found that nationally, on average, single drivers saved about 8 percent by bundling their coverage.
You’ll get good discounts if you buy anti-theft equipment. True or false?
Insurance companies encourage people to buy anti-theft equipment with the promise of discounts. But Consumer Reports found while you can pay hundreds of dollars for the devices, on average single drivers nationally saved an average of only $2 a year.
Insurance companies always reward long-time customers with a loyalty discount. True or false?
Some companies provide sizable discounts to long-time customers and others provide small ones, but some insurance companies provide none at all. In fact, some will raise your prices believing you will not seek a better deal elsewhere. Be sure to shop around every few years to make sure you are not overpaying.
A conviction for a DUI will drive up your premium higher than any other single factor. True or false?
A conviction for a DUI, or driving under the influence, will certainly result in a rate increase, as well as legal penalties, including license suspension, a criminal record, hefty fines, and possible jail time. But according to Consumer’s Union, in some cases, “a person with a drunk driving conviction but good credit can pay much less for their coverage than a safe driver with a clean record who has poor credit. In Florida, for example, a poor credit score can boost premiums by $2,417, but a drunken driving conviction boosts those premiums by only $866.”
What Insurance Companies Use to Set Your Rates
A woman opens her car door, only to have it smashed by a passing pick-up truck. A man puts a coin in a parking meter, then he notices his car rolling away and madly chases after it down a steep hill. A vehicle owner is dumbfounded when an air conditioner crash through his car’s roof, then looks up and sees the slippery-fingered installer in the apartment window above. An announcer tells us, “Humans, we mean well, but we’re imperfect creatures living in a beautifully imperfect world.”
The commercial for Liberty Mutual Insurance is an amusing reminder for why we need auto insurance. But whether it’s Geico’s talking gecko, Allstate’s havoc-raining Mayhem, or Progressive’s overly perky Flo, car insurance can be a lot less fun than the commercials that seek to sell it.
You may think that your safe driving history has the most to do with your policy, but you’d be wrong. Here’s a checklist of what else can affect your insurance rates:
Your personal profile
Insurance companies consider issues like age, gender and marital status in determing risk and/or setting rates. One study found that wives whose husbands had just died were then charged 20 percent more on their auto policy, an unfair practice dubbed a “widow’s penalty.” Other studies from the Consumer Federation of America have found that good drivers who are blue collar workers and drivers without college degree pay higher premiums.
Insurers will also look at other members of your household, such as whether you have teenage drivers – something that could cause your policy to double or even triple (See our guide on teen drivers). Using data from Quadrant, MoneyGeek analyzed a sample of car insurance rates in Florida and found that the median cost of an annual premium for a 50-year-old couple with one 16-year-old driver was $4,356. That’s more than double the median premium for a couple without a teenage driver (only $1,784).
Being a renter
The Consumer Federation of America recently did a study that found insurers discriminate against renters. Major auto insurance companies charge good drivers as much as 47 percent more for basic liability auto insurance if they don’t own their home, according to the nonprofit’s 2016 analysis of premiums. Based on a sampling of insurance quotes across the country for a 30-year old safe driver, CFA found that average premiums were seven percent higher – about $112 per year more – for drivers who rent instead of own homes.
Geico was the sole company that did not take home ownership into account across the country. In contrast, Farmers Insurance in Louisville charged safe-driving renters $768 more a year than homeowners for a basic auto insurance policy – a difference of 47 percent.
Your driving history
Have you been in many accidents? Have a lot of speeding tickets? Commute long distances and rack up a lot of miles on the road annually? All of these can up your rates.
Where you live
In determining risk, your insurance company will consider where you live to determine your risk of being in an accident or the victim of theft or vandalism. The Consumer Federation of America has reported that insurers charge more for insurance in predominately African-American neighborhoods than they do in white neighborhoods. In addition, even affluent African-Americans tend to be charged more than whites – up to 112 percent more, according to the CFA.
The type of car you drive
The type of car you drive will affect your rates because some cars cost more to repair or are associated with speeding or other problemscr. Parts for a foreign sports car, for example, tend to run higher than parts for an American economy car. In addition, teens will be charged more if they drive a sports car or SUV, because those models are associated with speeding and rollover crashes, respectively. In California, for example, MoneyGeek’s analysis of Quadrant data showed you could save an average of $2,000 or more a year if you owned two older family-style cars instead of newer-model sports cars.
Your social media posts
Active on Twitter, Facebook and Instagram? Someone other than your friends may be watching you. Insurance companies have long used social media to investigate claims; in fact, one insurance services company, Contego Services Group, has a whole unit devoted to social media investigations. But lately insurance companies have been scouring the Internet for a different purpose: To help determine your coverage risk. That picture of you sky-diving or having a drink with friends might suggest you’re a higher risk. Lambasting the use of social media as an underwriting tools, group like Consumer Action urge you to set your social media privacy settings to the highest level.
This is a recent innovation in auto insurance, in which insurers use “black box” technology and other devices to track your driving behavior and use that to adjust your premium rates. In theory, good drivers could benefit (if you don’t mind your insurance company watching you), and bad ones could be penalized. But the practice has raised privacy concerns, and some states have passed laws requiring the disclosure of tracking practices and devices, according to the National Association of Insurance Commissioners.
Whether you’re a bargain shopper
The practice is known in the trade as price optimization. To determine how much of a bargain shopper you are, insurance companies will consider things such as how often you might switch your Internet provider, what you buy at the grocery store, and how likely you are to complain on social media outlets about services. If your profile seems to fit someone who will stay on despite a rate increase, you may get socked with a higher rate. Using price optimization is illegal in some states, like California, which has strong consumer protections. But it’s just one of the many ways insurance companies will use private information to set your rate, according to the CFA.
Your credit history
California, Hawaii and Massachusetts prohibit insurance companies from using credit scores, but the industry does so where it can. According to Nationwide Insurance, 92 percent of insurers use credit scores to help set your car insurance rates, and Consumer Reports warns that your credit score can have a bigger impact on your premium price than any other factor. Insurance companies believe the score is an indicator of how likely it is that you will file a claim.
Consumer advocates have lambasted insurance companies for relying on data that has nothing to do with cars or driving history to set insurance rates. “Auto insurers are increasingly using socio-economic factors instead of driving factors – such as mileage and accidents – in their pricing of policies,” the CFA has reported in testimony before Congress. “These unfair practices…adversely impact affect low-income consumers and people of color.” CFA has called on regulators to end the use of home ownership, occupation, credit scores and non-driving factors in deciding premiums.
Using Your Car Insurance Coverage: How to Get What You Need When Making a Claim
Filing a claim is the ultimate test of whether you have chosen the right insurance company.
Bob Hunter of the Consumer Federation of America says it’s important to document all your interactions with your insurance company as you work your way through the claims process. This includes noting the date of phone conversations, what was discussed, assurances made, any problems that arose during the call, and the name and position of the person you spoke with. Should you run into problems later, this will help you document them with your company and make them more responsive in resolving any dispute.
Don’t assume they are going to be bad to you,” says Hunter, “but don’t assume they are going to be good.
Among the steps you should take:
Before contacting your insurance company, check what coverage you have and what your deductibles are. If your car is going to be in the repair shop for a while, check to see whether you have rental car reimbursement coverage.
Most claims today are initiated through a claims call center or the company’s website rather than the agent who sold you your policy. These claims centers generally operate 24 hours a day. When you make the initial report, be sure to record the name of the adjuster assigned to you. Get a phone number for the adjuster or the claims office, and write down your claim number. Also, ask when you can expect to hear from someone.
When the adjuster contacts you, he will take a statement from you about the accident and any injuries that occurred. This statement will likely be recorded. The adjuster should also tell you how the company will determine the amount of your loss and how you can get your car repaired.
The adjuster will likely suggest that you use a specific repair shop that has a relationship with the insurance company, since this is one way that insurance companies control their repair costs. You have the right to use your own shop, so insist on it.
rather than “aftermarket” parts. Studies have shown that aftermarket parts tend to be lower-quality and more likely to cause car problems, but insurance companies sometimes use them to save money. Hold out for original parts.
Ask questions about whether you’re entitled to a rental car while yours is in the shop. If possible, arrange to have the insurance company directly billed for this rather than having to get reimbursed by them.
If you are filing a medical claim, for example, you will need to fill out forms that give your insurance company access to your medical records and bills related to treatment for the accident.
If you’re unhappy with the settlement or the way your adjuster is treating you, work your way up the ladder until you get satisfaction. If you are being denied coverage for something that you think you are entitled to, Hunter says to ask the adjuster what they are relying on in the policy language to not pay you. “If it is ambiguous, tell them so and that you think it should be paid. Document this because it will prevent them from giving you other reasons later.”