In some states, the cost of living is much higher than in other states. This has to do with land and home value, average wage and population density. These factors can often affect your car insurance rates too. In fact, some states have much higher rates than others, so it's a good idea to compare rates before your next big move.
Deciding Factors
Your insurance quotes are always decided by a number of different factors, no matter where you live. However, some states have circumstances that tend to edge premiums higher than for other regions.
Right now, the most expensive state in which to get car insurance coverage is Michigan. Michigan, as one of the states hit hardest by the current recession, currently has a very high unemployment rate. Studies show that there is a correlation between unemployment and the percentage of uninsured drivers. In Michigan, this connection is reflected in the extremely high car insurance rates, due in part to the large number of uninsured drivers on the road. Additionally, Michigan state laws guarantee unlimited coverage for personal injury, also called PIP, up to $480,000 per person. These generous coverage mandates are reflected in the inflated costs for insurance that are passed on to all Michigan policyholders.
The second most expensive state for car insurance premiums is Louisiana. Like Michigan, Louisiana has a lot of unemployment currently, which means a lot of uninsured drivers on the road. The court system in Louisiana also has a tendency to hand out very impressive verdicts in car accident cases that end up going to trial, and these costs that are absorbed by the insurance companies are then passed on to other policyholders.
Oklahoma comes in third on the list of most expensive states in which to buy auto insurance. Like numbers one and two on that list, Oklahoma reports a very high percentage of uninsured drivers on the road, up to 25 percent. Extreme weather conditions in the state are another reason auto insurance quotes may be higher priced in Oklahoma. Sitting in the heart of tornado country, Oklahoma also sees freak weather events like hail storms that cause major damage to cars. The claims filed for benefits due to weather put a financial strain on insurance companies, which is mitigated somewhat by hiking up everyone's insurance rates across the state.
Saving on Insurance
There are states where cheap auto insurance quotes are the norm, as well. Vermont and South Carolina both encourage competitive rates among insurance companies, so providers have greater incentive to keep premiums low. Both states also have low levels of traffic congestion combined with a lot of rural countryside. There are very few traffic lawsuits filed in either South Carolina or Vermont. All of these combine to allow insurance providers to deliver very cheap auto insurance quotes to residents of these states.
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