What if you found out that you lived in one of the most
expensive states for car insurance? You probably wouldn't pack your
bags and move just to get lower auto premiums. But you might be
curious why you're paying more and whether there's anything you can
do to get a better rate.
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A new study by
CarInsuranceQuotes.com
looks at insurance costs state-by-state and examines why rates vary
so much. CarInsuranceQuotes.com used the median annual car
insurance premium in each state (plus the District of Columbia) to
determine which states' residents pay the most and least for auto
coverage. Here are the results:
Most expensive
1. Michigan ($4,490 median annual premium)
2. Louisiana ($2,912)
3. District of Columbia ($2,570)
4. New Jersey ($2,556)
5. Delaware ($2,456)
6. New York ($2,334)
7. Kentucky ($2,292)
8. Rhode Island ($2,132)
9. West Virginia ($2,074)
10. Nevada ($2,070)
Least expensive
51. North Carolina ($860)
50. Oregon ($1,108)
49. Massachusetts ($1,128)
48. Ohio ($1,128)
47. Maine ($1,160)
46. Iowa ($1,202)
45. Hawaii ($1,244)
44. Indiana ($1,268)
43. Utah ($1,270)
42. Idaho ($1,290)
State regulations are a major reason rates vary so much. Car
insurance is so expensive in Michigan because it's a no-fault
state. All policyholders must buy personal injury protection, which
covers their own medical costs in an accident regardless of who is
at fault. It's also the only state that guarantees unlimited
personal injury protection, says John Egan of
CarInsuranceQuotes.com.
Other factors also play a role: the costs of car repair and
medical care, the amount of insurance fraud taking place, the
number of uninsured drivers and the number of people living in an
area. Rates in Louisiana are so high because the state leads the
country in injury claims, and policyholders are more likely than
those in other states to hire attorneys, according to
CarInsuranceQuotes.com.
On the flip side, the cost of insurance in North Carolina is
low, in large part, because a state bureau sets a base rate. The
state also has a subsidized high-risk insurance pool for riskier
drivers who companies won't insure at the low base rate.
Egan says that it's important to remember that, regardless where
you live, you can get a better deal on auto insurance by shopping
around. The Consumer Federation of America found that rates for the
same insurance for a hypothetical consumer ranged from $762 to
$3,390. See our
tips for reshopping your car insurance
.
CarInsuranceQuotes.com also offers these tips for lowering your
rates:
Ask about discounts.
Although the base rates are high in Michigan, insurers do offer
discounts that help lower premiums. For example, if you have a good
credit history, you may qualify for a discount. Or you can save by
bundling your auto and homeowners policies with one insurer.
Consider usage-based coverage.
You have to agree to let the insurance company install a device in
your vehicle to monitor your driving. But you'll pay a lower
premium if the insurance company determines that you're a good
driver. See
Data-Tracking Technology Can Help Lower Your Car
Insurance
.
Consider liability only.
If your car is five or more years old, depending on its value, you
may be better off dropping both collision and comprehensive
coverage and banking the savings. Estimate your car's value at the
Kelley Blue Book
site
to decide whether the extra you're paying for collision and
comprehensive coverage is worth it.
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