When buying insurance, we always want to find the cheapest rates that offer high-quality products. The rate we get depends a lot on where we live. Where are the cheapest auto insurance premiums? Keep checking!
Why do premium rates vary from state to state?
Insurance companies take many factors into account when calculating premiums. Quite a few of these factors vary from state to state.
Some of the major factors are:
- Statutory requirements – Minimum insurance coverage can vary greatly from state to state, which can affect premiums. Michigan is currently one of the most expensive states for auto insurance. They have unlimited health insurance requirements to compensate for injuries sustained in a car accident.
- Population and Urban Areas – People in statistically densely populated states can expect higher insurance premiums because their vehicles are more likely to be involved in accidents, thefts, destruction, etc.
- Climate – People who live in states with harsh weather conditions, such as Louisiana or Florida, can expect an increase in comprehensive insurance claims because of the high likelihood of hurricanes, flooding and more. Extremely cold winters in states such as Michigan lead to increased insurance premiums because motor vehicle accidents are more likely to occur on slippery, ice-covered surfaces.
- Competition – More competition in the marketplace ultimately leads to competitive prices. People who live in states with more insurance companies to choose from tend to see lower premiums. In states with fewer choices for insurance companies, one of those companies is more likely to monopolize the market. That is, you can determine a much higher price.
Where is the cheapest week?
According to the data, the top 10 most affordable states for auto insurance in 2021 include:
- Vermont: Vermont’s population, the second most populous state in the United States, has declined because of fewer people behind the wheel. That means you’re less likely to get into an accident.
- Idaho: The fairly high competition and low population density among insurance companies illustrate the excellent insurance products customers can expect in Idaho.
- Iowa: Because of the small number of uninsured drivers and the short average commute distance, Iowans enjoy below-average rates.
- Maine: There are several factors that make Maine’s average premium one of the lowest in the United States. Rural areas, a low percentage of uninsured drivers, and greatly increased competition are forcing insurance companies to retreat to ensure rates are as low as possible.
- Wisconsin: Similarly, the high competitiveness of Wisconsin’s semi-rural areas and insurance companies allows residents to get very attractive deals.
- Ohio: Despite a fairly high population, Ohio’s infrastructure of a healthy balance of rural and urban areas avoids traffic congestion. This greatly reduces the likelihood of getting into a car accident.
- Wyoming: Limited traffic, low population density and few uninsured drivers on Wyoming’s rural roads are just a few reasons why state residents enjoy fares that average 48% lower than the national average
- Indiana: The state of Indiana requires only basic duties. Along with low crime and public vandalism statistics, this factor put Indiana in the top 10 states with the lowest insurance premium rates.
- Illinois: Despite a fairly high population density, Illinois has a fairly low percentage of uninsured drivers and is highly competitive among insurance companies.
- Montana: Living in the third least populous state in the United States certainly has its advantages. Montana also has a low percentage of uninsured drivers, so residents can expect very attractive rates.
What other factors affect the premium of a car?
In addition to your state, the amount you pay for auto insurance is determined by many other factors. You may drive some vehicles, such as your driving history, driving record, or range limits. Other things we have no control over. Factors such as age (older and inexperienced younger drivers tend to see higher rates. Gender can also be a factor, as men under the age of 30 tend to have more accidents. Learn more about how to calculate insurance here.
How can I get the best price?
Whether you live in a cheaper state or a more expensive one, you can still find ways to save money. The key to finding the best coverage is knowing your options.
Sure, you can visit several Web sites and re-enter information to get a quote. But Gabi is here to help! Our main goal is to save not only money, but also time, an asset you can never buy again. With Gabi, you can get quotes from over 40 carriers in minutes! All we need is your current insurance information.