According to data analysis by Insure.com, Maine is the cheapest state for car insurance, with an average annual premium of $864. This is the third year in a row, and sixth time out of the eight years the comparison study has been conducted, that Maine has grabbed the title of the cheapest state.
On the opposite end of the spectrum is Michigan -- named the most expensive state for car insurance for the fourth consecutive year. The lowest Michigan has even been on the most expensive list is third, back in 2012. That was the year that Louisiana, which claimed second place this year for most expensive, took the No. 1 spot.
Michigan’s average annual premium is $2,394, which is 82 percent higher than the national average of $1,076. It is 177 percent more than Maine’s cheapest average rate for the country. For an example of how rates compare for specific vehicles, insuring a 2017 Toyota Camry LE in Michigan costs, on average, $2,711. In Maine, the average rate for the best-selling sedan is just $945.
See the full story, including the average insurance rates for every state and the top 20 best-selling vehicles, at Insure.com’s car insurance rates by state, 2017 edition.
Car insurance requirements vary by state, and that’s one reason for the differences in rates. Other reasons include state legal systems, how the state is affected by natural disasters, crime rates and the frequency and severity of claims.
Top five most expensive states to insure for 2017 (average rate and how they compare with national average):
“Michigan residents can blame their unique no-fault system for their high cost of auto insurance,” says Penny Gusner, consumer analyst for Insure.com. “It allows for unlimited medical benefits for injuries sustained in auto accidents and a lot of fraud arises -- the result is exorbitant car insurance premiums for car owners.”
Louisiana’s high rates are due in large part to the litigious culture of the state. When large claims are continually paid out, insurance companies raise all policyholders’ premiums to cover these settlements.
Top five least expensive states to insure for 2017 (average rate and how they compare with national average):
“States with cheaper car insurance rates tend to be more rural regions of the nation,” Gusner says. “A higher concentration of motorists in metro areas leads to crashes, claims and thus higher auto insurance rates. Car insurance companies see rural regions with less traffic to be less of risk and, thus, charge less.”
Insure.com commissioned Quadrant Information Services to calculate auto insurance rates from six large carriers (Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm) in 10 ZIP codes per state. Rates were compiled in May 2017.
Rates were averaged in each state for the cheapest-to-insure 2017 model-year versions of America’s 20 best-selling vehicles for the first quarter of 2017 and each state was ranked by that average. These models represent a little over 40 percent of the U.S. new-car market in 2017. By highlighting the most popular vehicles, averages are more accurate without high-end sports or luxury cars skewing the data. Rates are for comparative purposes only within the same model year.
Rates are based on full coverage for a single, 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. The hypothetical driver has a clean record and good credit. The rate includes uninsured motorist coverage. Actual rates will depend on individual driver factors.