How do auto insurance costs vary by state?

How do auto insurance costs vary by state?

The National Association of Insurance Commissioners (NAIC) estimates the national average annual cost of full coverage auto insurance at $1,030 (approximately $86 per month).

NAIC research has also found that drivers have saved money on coverage in recent years due to competition among insurers.

However, costs may vary by state due to various factors. Instead of using a calculator, scroll over the map below to see the state minimum requirements and the average cost of coverage in each state.

According to the Vermont Department of Banking, Insurance, Securities, and Health Care, drivers in Vermont pay an average of $1,250 a year (about $104 a month).

Comparatively, drivers in New York, the District of Columbia, Louisiana, Michigan, and New Jersey pay the highest average premium rates.

According to the New Hampshire Department of Insurance, New Hampshire drivers pay about $1,000 a year ($83 a month). New York drivers pay an average of $2,700 per year ($225 per month), reports the New York Department of Financial Services.

According to the Minnesota Department of Commerce, drivers in Minnesota pay about $1,200 a year (about $100 a month).

Which states have higher than average car insurance rates?

Note that the average rates for Louisiana, Michigan, New Jersey, and DC are significantly above the national average. Iowa and North Dakota rates are far below.

Typically, urban areas with heavy traffic have higher rates than rural areas with more dispersed populations and fewer cars.

New Jersey and DC rank one and two in the nation for the highest average price of comprehensive coverage, while Iowa and North Dakota rank 49th and 50th. New Jersey and DC are almost entirely urban, while Iowa and North Dakota have vast rural landscapes.

Of course, North Dakota and Iowa do have some mid-sized cities. Auto insurance rates are likely to be higher than the state average in Bismark and Sioux City, while rates in rural areas are likely to fall below average.

How can I save money on my monthly auto insurance rates?

Take a look at the list below for some great ways to save big on auto insurance.

  • Participation in safe driver programs can result in impressive savings for good drivers (15 percent or more, according to AAA).
  • Buy at least six months of coverage at a time, instead of paying monthly insurance premiums. Companies may offer a discount for early payments.
  • Combine at least two policies to get discounted rates.
  • Consider your vehicle’s safety record. Your car’s safety rating can affect the price of your monthly premium.

Let’s take a closer look at the NAIC’s national average car insurance rates to determine car insurance costs by type of coverage.

Now that you have more information, you can stop wondering “How much should I pay for car insurance?” and compare rates to save money.

How do I find the average cost of car insurance?

Calculating the average cost of auto insurance is a complicated process because there are so many variables in calculating your average monthly cost. There are many different calculators online that you can use for estimating purposes.

Having a little background information will help you determine how much to pay for insurance.

How do coverage limits affect your rates?

Each state has a required minimum amount of bodily injury coverage, property damage coverage, medical payments coverage, and uninsured and underinsured motorist coverage.

  • Bodily Injury Coverage – Provides you with protection if you are legally responsible for bodily harm to others.
  • Property Damage Coverage – Protects if you are legally responsible for property damage to the property of others
  • Medical Payments Coverage – Pays for medical expenses incurred by you and your passengers after an accident.

Remember, these are the basic liability coverages required by law.

The legal requirement is not the only reason to buy car insurance. Insurance protects you and your financial stability.

If each of us had to pay individually for car accidents, it could cause great financial hardship.

Not many of us could produce liquid cash to pay a $150,000 hospital bill incurred due to an accident we caused.

Therefore, as individuals, we cannot afford to accept only the minimum protection required by law, even if it costs less.

By aamritri

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