Car Insurance Rates and Trends by State: Cheapest & Most Expensive States in 2021
Local laws, regulations and other factors can dramatically impact insurance costs, which means wide variations in car insurance rates by state. For example, as of this writing, Maine has the cheapest rates in the nation, with an average annual premium of $589. Michigan has the most expensive rates in the nation, with an average annual premium of $4,003, making insurance 579.63% more expensive in Michigan than in Maine. These numbers are based on a variety of factors, including whether drivers had full insurance coverage. A detailed breakdown of MoneyGeek’s methodology and high standard for data integrity can be found at the end of this article.
- The most expensive state for full coverage auto insurance is Michigan, at roughly $4,003, over three times the national average of $1,265.
- The least expensive state for full coverage auto insurance is Maine, at roughly $589, 53.4% below the national average.
- The most expensive minimum coverage state is Michigan (about $2,653), while Wyoming is the least expensive (about $284).
- Rates have on average decreased across the country by 2.7% driven by the pandemic.
- The largest change in rates year over year is Michigan with a 25% decline in annual premiums. South Carolina had the largest increase in rates in 2021 with a 4.3% increase in rates.
- On average rates since 2015 are flat, but that disguises large differences by state. In Montana rates increased by 37% while in New Jersey rates have come down by 30%.
Average Car Insurance Rates by State
Car insurance costs can vary wildly based on your location and whether you carry full coverage or liability-only insurance, so MoneyGeek analyzed hundreds of thousands of car insurance quotes from across the country to determine the average cost of car insurance by state.
Sample insurance quotes were based on a 40-year-old male driver with a clean driving record who carries comprehensive and collision coverage. This fictional driver would have an average annual insurance premium of $1,265 nationally. But because each state is so different, this driver could pay anywhere from a few hundred to several thousand dollars depending on his specific location.
Average Cost of Comprehensive and Collision Coverage by State
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- StateAnnual PremiumVs. National Average
- 2.New York$3,896208.1%
- 6.Rhode Island$1,78841.4%
Average Cost of State-Minimum Liability Coverage by State
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- StateAnnual PremiumVs. National Average
- 2.New York$2,604286.4%
- 5.Rhode Island$1,07759.8%
- 8.New Jersey$90934.9%
Car Insurance Cost Trends by State
It can be confusing to see your insurance costs change from year to year, but there are many reasons your premium might go up or down over time. Changes in state insurance rules and regulations can impact your premiums. So can an increase or decrease in the number of claims made in your state. And as your driving habits evolve — for example, if you have a shorter commute or a speeding ticket on your record — you may also see those changes reflected in lower or higher premiums. The table below shows the changes in the average full coverage insurance rate by state from 2020 to 2021 and the change in rates since 2015.
Change in Car Insurance Costs Over Time by State
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- State2021% Increase 2020-2021% Increase 2015-2021
- South Carolina$1,0864.3%11.8%
Local Legislation and Traffic Trends
Some states saw changes in cost due to new local laws:
Arizona: Arizona increased the minimum liability levels in a change effective July 1, 2020. While many have expressed concern that this will ultimately raise rates, this has so far not borne out: Arizona's rates have slightly decreased from 2020 to 2021 instead.
Michigan: Michigan experienced the largest decrease in rates from 2020 to 2021, with rates declining an average of 25%. This is due, in part, to the state's recent move to reduce no-fault requirements — a primary driver of the state's historically high insurance rates.
New Jersey: New Jersey's auto insurance premiums have declined the most over the longer term, with drivers experiencing a 30% drop in annual premiums since 2015. Whether that downward trend continues is still to be determined: there are two legislative proposals currently being debated that, if passed, will have a significant impact on insurance rates. The first is Senate Bill S111, which would ban auto insurers from considering a driver's credit score, occupation, education level, marital status and other similar factors when determining premium amounts. And the second, the New Jersey Insurance Fair Conduct Act, would make it easier for citizens to file civil lawsuits against insurers for bad faith claims.
South Carolina: South Carolinians saw the largest year-over-year rate increase in insurance costs: their rates increased an average of 4.3% from 2020 to 2021. While data is not yet available for 2020, collisions have been on the rise in recent years. According to the South Carolina Department of Public Safety, there was one traffic collision every 3.7 minutes and one fatal collision every 9 hours on average in 2018. And the number of fatal collisions in a year has increased steadily — from 756 in 2014 to 969 in 2018 — a trend that is undoubtedly reflected in South Carolina's car insurance rates.
Montana: Montana holds the top spot for insurance premium rate hikes, with Montana residents seeing the steepest increase in coverage costs over the last six years. Rates there increased by an average of 37% since 2015. As with South Carolina, this can, in large part, be attributed to Montana's persistently high traffic fatality rate. The state counted 212 traffic fatalities in 2012, and preliminary data on 2020's fatality numbers indicate this number has stayed high: the Montana Highway Patrol reported there were 207 deaths last year due to car accidents.
COVID-19's Impact on Car Insurance Rates
In 2020, the world saw unprecedented changes caused by the COVID-19 pandemic that took millions of drivers off the road as they decided to work from home. An estimated $14 billion in insurance premiums was refunded to customers because insurance companies saw upwards of a 40% reduction in losses.
Many insurance companies expect that some of the changes brought about by the pandemic will be permanent. That has encouraged them to get ahead of the competition and lower their rates to compensate for the reduction in drivers on the road. In February 2020, there were 3,277,759 million miles driven in the United States, but that number dropped to 2,857,200 million miles by November. With many companies announcing that work from home options will continue for the foreseeable future, insurance companies are wise to consider that the reduction in miles driven may continue for many months or years.
While the final numbers weren’t available at the time of this writing, the second quarter of 2020 showed a decline in overall traffic fatalities, further reducing insurance premiums for drivers across the country.
Which States Have the Cheapest Car Insurance?
After careful review, MoneyGeek has determined that the ten states listed below have the cheapest full coverage insurance in the nation. However, even if you live in one of the states with the cheapest car insurance, you should still compare quotes to find the cheapest coverage in your state.
Here are the states with the lowest average annual full coverage premiums:
- Maine: $589
- Idaho: $674
- Iowa: $674
- Indiana: $685
- Ohio: $719
- North Dakota: $733
- New Hampshire: $741
- South Dakota: $758
- Virginia: $785
- Vermont: $785
With premium prices varying so widely by state, MoneyGeek researched why prices are so low in the three cheapest states.
Why Maine Auto Insurance Is So Cheap
Maine has much higher minimum insurance requirements than many other states, but they still manage to keep their average insurance rates low. This is because they have the lowest percentage of uninsured drivers in the nation: only 4.5% of Maine drivers are uninsured. They also have low rates of vehicle theft and overall accident fatality rates, both of which contribute to their low annual premiums.
Why Idaho Auto Insurance Is So Cheap
Idaho is second on the list of lowest insurance costs in the nation, primarily because Idaho has very low rates of theft, with fewer than 88 vehicles stolen per 100,000 people annually. It is also a sparsely populated state: fewer drivers share the roads, which helps bring down the number of accidents each year.
Why Iowa Auto Insurance Is So Cheap
Which States Have the Most Expensive Car Insurance?
Though this list can change from year to year, as of 2020, the ten states listed below are the most expensive car insurance states in the nation. Residents in these ten states can save several hundred dollars each year by comparing quotes to find the cheapest available coverage.
The states with the most expensive annual car insurance on average are:
- Michigan: $4,003
- New York: $3,896
- Louisiana: $3,419
- Florida: $1,919
- Maryland: $1,886
- Rhode Island: $1,788
- Nevada: $1,738
- Georgia: $1,511
- New Jersey: $1,463
- Delaware: $1,453
With premium prices varying so widely by state, MoneyGeek researched why prices are so high in the three most expensive states.
Why Michigan Auto Insurance Is So Expensive
Michigan has the most expensive insurance for multiple reasons, but the primary cause is the state’s no-fault insurance laws. Though these laws were initially intended to help lower insurance costs, states with no-fault insurance laws have instead seen their rates skyrocket over the years. More than that, Michigan has a high percentage of uninsured drivers, and its default PIP policy guarantees unlimited coverage.
Why New York Auto Insurance Is So Expensive
New York City has the highest population density of any place in the U.S., with more than 27,000 people per square mile. This incredibly dense population is part of what causes high insurance rates in New York. Other factors, such as rates of vandalism and pedestrians injured or killed in an auto accident, stem from the incredibly high number of people living in the same area.
Why Louisiana Auto Insurance Is So Expensive
Louisiana makes the list of most expensive states for car insurance because their statute of limitations is only one year, which means people must rush to court if they think they may be owed compensation in an accident. Some experts have also indicated that there are frequent bodily injury claims and lawsuits made in the state, driving up the cost for insurers.
Why Does Car Cost Insurance Vary by State?
Car insurance costs can vary widely from state to state. Local laws and population density are only two of several factors that can dramatically impact the cost of insurance for people living in a specific state, including:
- No-Fault vs. At-Fault Insurance – Though no-fault coverage was initially conceived to lower insurance rates, it hasn’t worked that way in reality. No-fault states often require Personal Injury Protection coverage, otherwise known as PIP, which can drive up insurance costs.
- Vehicle Theft – Replacing a stolen vehicle is very expensive, which is why so many people choose to carry comprehensive insurance coverage. Likewise, replacing a vehicle is a costly claim for an insurance company to pay. So states with high levels of vehicle theft are likely to see higher insurance rates to compensate for the additional claims.
- Uninsured Motorists – The basic concept of insurance is that it spreads out the financial risk of owning a vehicle. Everyone contributes a small amount each month, and those funds are used to pay for emergencies for those who need it. The fewer people there are sharing the risk, the more it costs those in the financial pool. So states with many uninsured drivers will naturally have more expensive insurance rates.
- Weather/Natural Disasters – Places that experience extreme weather often have higher rates because of it. In Louisiana, for example, hurricanes in the Gulf Coast can cause billions of dollars in damage, and insurance companies are on the hook for paying those claims. The insurance rates in those areas are higher to accommodate those costs.
FAQs About Car Insurance Rates by State
You may still have some questions regarding car insurance rates by state. Here are our answers to a few of the most common ones.
MoneyGeek analyzed auto insurance quotes across all 50 states to determine the auto insurance companies with the cheapest rates. The cheapest premiums were calculated by gathering quotes for comprehensive and collision coverage of 100/300/100 with a $1,000 deductible for a 40-year-old male with a clean driving record.
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