Car insurance rates by state for 2022 – Forbes Advisor

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The state where you live is an important factor in determining how much you’ll pay for car insurance. Differences among states affect car insurance cost based on what auto insurance is required, how much repairs costs are and more.

The national average cost for car insurance is $2,118 per year, according to Forbes Advisor’s analysis of full coverage car insurance rates. New York is the most expensive state for car insurance, and Idaho is the cheapest.

Car Insurance Rates by State

It’s good if your state has a competitive auto insurance market, meaning a number of national and regional car insurance companies selling insurance. You can shop around for the best car insurance and find the most affordable price.

Average car insurance costs by state

Buying minimum coverage car insurance gets you cheaper rates but less protection. Minimum coverage car insurance may only include liability coverage that pays those harmed if you’re at fault in an auto accident.

Full coverage auto insurance includes comprehensive and collision, which protects your vehicle from various issues, including theft, fire, vandalism, severe weather or damage from an auto accident, regardless of fault.

Why Does Location Affect the Cost of Insurance?

Here are some of the most common factors that affect car insurance rates in each state.

Minimum state car insurance coverage and limits

Some states require only liability coverage (for bodily injury and property damage that you may cause others in an auto accident), while others require you to buy extra coverages such as uninsured motorist coverage, medical payments (MedPay) or personal injury protection (PIP).

States that mandate more coverage types as part of a car insurance policy can produce higher auto insurance costs. For instance, states that require PIP coverage tend to have higher car insurance prices. For minimum-required coverage, Florida, Michigan, New Jersey, New York and Delaware are the five most expensive states and all mandate PIP.

You may also see higher car insurance costs if your state requires higher auto insurance coverage limits. For example, Texas has liability limits of 30/60/25, which break down to $30,000 per person of bodily injury liability, $60,000 per accident and $25,000 of property damage per accident. The neighboring state of Oklahoma has lower limits of 25/50/25. Texas minimum car insurance costs are nearly $200 higher than Oklahoma ($650 compared to $456).

Other factors can also affect that rate besides state coverage and limit differences.

Number of auto insurance claims in your state

The number of car insurance claims in your state can impact your price for auto insurance. The more claims made in your state, the higher car insurance costs you’ll see. Reasons that drivers in some states see more claims than other states include:

  • Severe weather events. If your state has a higher rate of severe weather that damages cars or helps cause accidents, rates will typically be higher. For example, Florida is known for the extreme weather it receives, such as hurricanes, and its state car insurance costs are much higher ($4,326 per year for full coverage) than Ohio ($1,112), which has milder weather conditions.
    Severe weather car insurance claims can result from damage due to high winds, hail, tornadoes, hurricanes and flooding. Comprehensive coverage covers these types of damages.
  • Urban vs. rural. Congested cities are prone to more auto accidents, so living in a state with several metropolitan areas can cause car insurance to cost more. For instance, Connecticut is a mostly urban state, and its full coverage car insurance cost is $1,730 per year. In contrast, Iowa, a mostly rural state, has an average annual full coverage cost of $1,238.
  • High crime areas. If your state has a higher rate of car insurance claims associated with crimes, car insurance prices usually are higher. For example, suppose your area has a higher-than-average rate of vandalism or car theft. In that case, you’ll likely see more expensive car insurance costs because car insurance companies view insuring your car as a higher risk for them.

Cost of car insurance claims in your state

How much it costs for car insurance companies to pay claims varies by state. The main reasons for that are:

  • Car repair costs. The cost of parts and labor varies from state to state. States with higher pricing for car repairs or replacing a car (if your car is totaled) can cause car insurance prices to be higher.
  • Cost of medical care. Medical expenses for car accident injuries differ by state. If your state has lower costs for medical treatments, you may see lower costs than a state with  high medical costs.

If car insurance companies spend more money paying out claims throughout your state compared to other states, car insurance costs in your state will be higher.

Frequency of lawsuits in your state

You’ll usually see higher car insurance prices if your state’s drivers are more litigious. Lawsuits over auto insurance accidents tend to lead to higher claim settlements, which results in car insurance companies charging higher car insurance costs for all drivers in an overly litigious state.

For example, Louisiana has a much higher rate of bodily injury car insurance claims and lawsuits than the national average. Louisiana also has the third most expensive average annual full coverage car insurance cost at $3,629.

State Minimum Requirements for Auto Insurance

Each state has its own car insurance laws dictating the minimum car insurance coverage and limits a driver can buy. Here are the main types of coverage that states may require.

Liability insurance

All states require you to include liability car insurance if you buy a car insurance policy. Liability car insurance covers you when you cause an auto accident and harm others.

The bodily injury liability coverage portion of liability car insurance pays for the medical expenses of those you injured and has limits per person and per accident. The property damage liability coverage portion pays for damages you caused to someone else’s car or other property, such as a fence, and there is a per accident limit.

Liability car insurance limits are usually shown as three numbers, such as 25/50/25, which stand for:

  • 25 = $25,000 of bodily injury liability per person
  • 50 = $50,000 of bodily injury liability coverage per accident
  • 25 = $25,000 of property damage coverage per accident

Uninsured motorist insurance

Uninsured motorist coverage bodily injury (UMBI) covers your injuries if an uninsured driver crashes into you. UMBI has limits that typically match your bodily injury liability per person and per accident limits.

Underinsured motorist (UIM) coverage is also required in some states and can be bundled with UM coverage. Underinsured motorist coverage pays you if the at-fault driver does not have enough coverage to pay for your injuries.

There is also uninsured motorist property damage (UMPD) to cover your car’s damages from the uninsured driver. UMPD is required in only seven states.

Personal injury protection or medical payments

Personal injury protection covers injuries you and your passengers receive in an auto accident, regardless of fault. It also pays for lost wages, rehabilitation services and replacement services for tasks you cannot perform due to your injuries, such as child care. PIP is required in 15 states.

Medical payments coverage is required in three states and pays for accident-related medical expenses for you and your passengers regardless of fault. It typically has low limits and does not offer PIP’s extra benefits.

Minimum car insurance requirements by state

Notes about minimum state car insurance coverages

Michigan car insurance also requires property protection insurance (PPI) with a $1 million limit. This coverage is unique to Michigan and pays for damages you cause with your car to other people’s property in Michigan, such as a building, fence or mailbox.

On Jan. 1, 2023, New Jersey’s liability limits will change from 15/30/5 to 25/50/25 and uninsured motorist bodily injury limits also go up to 25/50.

Which States Have the Most Expensive Car Insurance?

New York, Florida, Louisiana, Pennsylvania and Maryland have the most expensive car insurance, according to our analysis of car insurance rates by state. If you live in one of these states, you’ll see some of the country’s highest car insurance costs.

Most expensive states for car insurance

New York’s average car insurance cost of $4,769 is 125% higher than the average national price of $2,118.

The reasons why these car insurance rates by state are high vary, but some factors affecting the costs in these states include:

  • Large urban areas. Congested areas result in higher rates of car accidents and claims. For population density, Rhode Island ranks 3rd, Maryland ranks 7th, New York 9th, Florida 10th, and Pennsylvania 11th, according to the U.S. Census.
  • No-fault laws and fraud. Florida, Michigan, New York and Pennsylvania have no-fault laws in place, and unfortunately, no-fault states tend to have higher rates of fraud, which pushes the cost of car insurance up in these states.
  • Lots of lawsuits. Louisiana is a litigious state with a higher-than-average number of car insurance lawsuits. New York also is known for being highly litigious. Claims dealt with in court can have bigger settlements, and thus insurance costs for all drivers in the state rise.
  • Severe weather. Florida and Louisiana are especially prone to bad weather, including hurricanes that can cause substantial damage to cars. Paying out a lot of claims in a short period after a severe weather event can result in car insurance companies raising car insurance costs.

Which States Have the Cheapest Car Insurance?

Idaho, Vermont, Ohio, Maine and Iowa have the cheapest car insurance costs in the country.

Cheapest states for car insurance

Idaho’s car insurance cost of $1,021 is 52% cheaper than the national average car insurance cost of $2,118.

The reason these states have the cheapest auto insurance has a lot to do with the makeup of the state. The cheapest states often have a large number of rural areas, which helps keep car insurance costs down compared to states with several congested metropolitan areas.

For population density, Vermont ranks 33rd, Iowa is 38th, Maine is 40th, Idaho is 44th, North Dakota is 49th and Wyoming comes in 51st, the least populous state, according to the U.S. Census.

The weather is mild in most of these states, especially compared to states like Florida and Louisiana, which experience severe weather and are two of the most expensive states for car insurance. Many of the cheapest states also have competitive car insurance markets, allowing drivers to compare car insurance quotes from multiple companies.

State-specific Car Insurance Laws

Liability insurance is the foundation of every state car insurance policy because states want drivers to be able to pay for damages they cause others in an auto accident. However, not all states mandate that drivers buy a car insurance policy.

New Hampshire and Virginia don’t require drivers to carry auto insurance. It doesn’t mean you should skip car insurance in these states. Car insurance can still be important for New Hampshire and Virginia drivers so they have the financial means to pay for damages after an auto accident. Here is what is required in New Hampshire and Virginia:

  • New Hampshire normally doesn’t require drivers to carry car insurance, but you have to show that you can meet the state’s minimum financial responsibility requirements if you cause an auto accident. The easiest way for most drivers to meet the state’s requirements is by buying car insurance.
  • Virginia drivers can opt out of buying car insurance by paying an uninsured motor vehicle fee of $500. This $500 keeps you from being penalized by the state for not showing proof of car insurance, but if you’re in an auto accident, you still need to be able to pay for other people’s injuries and property damage. If you don’t have the money to do that on your own, buying a Virginia car insurance policy is the simplest way to get that protection.

Other state-specific car insurance laws can impact auto insurance costs. For instance, Michigan requires drivers must buy property protection insurance, a coverage only available in that state. Property protection insurance covers damages you may do to stationary objects, such as buildings, fences, poles and guardrails, up to its $1 million limit.

Also, several states require drivers to buy personal injury protection, known as “no-fault insurance,” which covers your auto accident-related medical expenses and more.

No-Fault States vs. Fault States

Personal injury protection (PIP) is required in 12 states as part of “no-fault insurance” laws. These laws require you first to place claims for auto accident-related injuries with your car insurance’s PIP coverage and limit your ability to sue the at-fault driver for your injuries.

PIP covers medical expenses for injuries you or your passengers sustained in a car crash, regardless of fault. PIP also covers lost wages and replacement services if you cannot work or do household tasks due to your injury. Personal injury protection can also cover your health insurance deductible if you use your own medical plan for your medical treatment.

States that follow no-fault laws and require PIP coverage include:

  • Florida
  • Hawaii
  • Kansas
  • Kentucky (offers a choice of no-fault or some ability to sue)
  • Massachusetts
  • Michigan
  • Minnesota
  • New Jersey (offers a choice of no-fault or some ability to sue)
  • New York
  • North Dakota
  • Pennsylvania (offers a choice of no-fault or some ability to sue)
  • Utah

Delaware, Maryland and Oregon also require PIP but do not have no-fault laws limiting your ability to sue an at-fault driver.

Most states are “fault” states, meaning you can make an insurance claim against the bodily injury liability coverage of an at-fault driver and can sue the person that harmed you without the limitations no-fault states have in place.

Will My State Have Car Insurance Rate Increases Next Year?

Inflation and higher repair costs are a couple of reasons car insurance premiums are on the rise, so you will likely see an increase in your car insurance costs next year.

Car insurance companies have been filing paperwork with state insurance regulators to raise rates due to issues like higher claim costs.

Some states’ higher car insurance costs may also be due to natural disasters, which causes insurance companies to pay out a higher number of claims in a short period of time. Paying claims due to weather can cause auto insurance companies to raise prices for all drivers in that state.

If your car insurance company raises rates next year, you’ll see the increase at your next renewal period. If you’re notified about higher premiums, you can shop around to find out if your current company offers the best rates or if you can save by switching car insurance companies.

How to Change Car Insurance When Moving Out of State

If you move out of state, you must alert your car insurance company, even if they offer car insurance nationwide. You’ll need to change your auto insurance policy to match the needs of your new state, and it’s always a good time to shop around when you have a major life event, such as moving.

To make shopping for new car insurance easy, it’s helpful to have these items on hand and know the following information:

  • Driver’s license numbers of all drivers who will be on the policy
  • The age of each driver when they received their license
  • Any violations, accidents or claims from the last three to five years
  • Vehicle identification number of all vehicles to be insured
  • Annual miles put on each insured vehicle
  • What coverage and limits you want to buy

Once you know the effective date of your auto insurance policy, you can cancel your previous policy so there’s no overlap or gap.

What Factors Other Than Location Affect Auto Insurance Rates?

Where you live is just one factor that car insurance companies look at when determining your price for auto insurance. Here are the most common pricing factors.

Driving record

Your driving record is an important rating factor to car insurance companies because it shows them the risk you pose as a driver.

A driver with accidents or traffic violations on their driving records will pay more for car insurance than a good driver with a clean record. For example, our analysis finds drivers pay 24% more, on average, for car insurance after a speeding ticket. When determining car insurance costs, auto insurance companies review the last three to five years of your driving record, depending on your state.

Age and years of driving experience

Young, inexperienced drivers pay the most because they pose more risk as a driver to car insurance companies. As drivers age, mature and become more experienced behind the wheel, car insurance rates become cheaper.

Some states have banned insurance companies from using age as a rating factor in Hawaii. In Massachusetts, car insurance companies may not use age except for drivers age 65 or older. And while not directly forbidden, California lists what rating factors that car insurance companies can use, and age is not on the approved list.

California and Massachusetts allow years of driving experience as a rating factor. Hawaii bans the length of driving experience as a rating factor, so neither age nor driving experience should impact car insurance costs in Hawaii.

Gender

How age and gender affect car insurance go hand-in-hand. Young males are more likely to partake in risky driving behavior, so they see higher car insurance costs than females. As both genders age, car insurance costs become similar in their 30s through 60s. Around age 70, men again pose a greater risk as drivers, so they pay higher car insurance prices.

Gender can be a rating factor for car insurance in all states except California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania.

Marital status

You may get cheaper car insurance prices if you’re married because auto insurance companies find married couples pose less risk.

Hawaii, Massachusetts and Michigan prohibit the use of marital status for car insurance rates.

Car make and model

The vehicle you drive is important to car insurance companies, especially if you purchase collision and comprehensive coverage. These coverage types pay for repairs to your own vehicle or pay out the vehicle’s value if it’s totaled.

Car insurance companies look at past claims for your model when determining your car insurance costs. They also evaluate the repair costs, theft rates and payments made on previous claims to calculate the cost of insuring your car.

Coverage selections

The types of coverage and limits you choose will impact your auto insurance costs. If you buy more coverage and higher limits, you’ll pay more. For instance, liability-only car insurance will be cheaper than even the cheapest full coverage car insurance policy, but with a liability-only policy, you don’t get collision and comprehensive coverage that protect your vehicle.

Unless all you can truly afford is state minimum auto insurance, you should focus on your coverage needs and then comparison shop with multiple insurance companies to find the best car insurance price.

Deductible

A car insurance deductible is the amount of money deducted from an insurance check you receive for a comprehensive or collision claim. For example, if you claim $2,000 worth of damage to your vehicle and have a $500 deductible, your claim check would be $1,500. To save on car insurance costs, you can raise your car insurance deductible. Our analysis found that going from a $250 deductible to a $1,000 deductible can save you $334 a year.

Car insurance history

You’ll pay lower auto insurance prices if you’ve had continuous car insurance coverage. A gap in coverage will make you riskier to insure.

The same is true for new drivers getting their first insurance policy. You don’t have an insurance history for the car insurance company to evaluate your risk, so you’ll pay higher rates, at least at first.

Claims history

If you have clear claims history, your car insurance costs will be less than someone with a claim or two. Car insurance costs after an accident go up 45% on average after claims for property damage and 47% on average after a bodily injury claim.

You’ll see cheaper car insurance costs if you haven’t had claims for the last three to five years. If your driving record is also clear of traffic violations or accidents, you may receive a good driver discount to get even lower car insurance prices.

Credit-based insurance score

Car insurance companies say drivers with lower credit scores are more likely to file claims. That’s why car insurance costs for drivers with poor credit are often very high.

Not all states allow your credit to be used in pricing car insurance. Using a credit-based insurance score is banned from auto insurance rate calculations in California, Hawaii, Massachusetts and Michigan.

Car Insurance Rates by State FAQ

Being in a tort state means you can recover damages from an at-fault party after an auto accident. There are 38 tort states, and you can choose between limited tort or full tort in three of those states.

Full tort means there are no restrictions on your ability to sue the at-fault driver, while limited tort means you give up your right to sue for pain and suffering after a car accident. Kentucky, New Jersey and Pennsylvania allow you to choose limited tort to save on car insurance costs.

Twelve states are no-fault insurance states, limiting your right to sue the at-fault party.

How do I know if car insurance is required in my state?

Unless you live in New Hampshire or Virginia, a minimum amount of car insuranceis required in your state if you’re operating a car on the roadway

New Hampshire doesn’t require car insurance to register your car. But if you’re in an auto accident, you must be able to show financial responsibility, and the easiest way is to have an auto insurance policy.

In Virginia, car owners can pay a $500 uninsured motor vehicle fee to opt out of carrying insurance. But if you cause an accident, you can be penalized if you cannot pay for the damage you caused to others.

Does car insurance go down after one year and no claims?

If you’re a new driver, your car insurance costs can go down if you’ve gone a year without any claims, accidents, or traffic violations on your driving record. This helps reassure the auto insurance company that you’re a safe driver.

If you’re a driver who made a claim just over a year ago, you may see your car insurance costs go down a bit at renewal time but will have to wait to see more of a price break.

Car insurance costs after an accident can go up 45% on average after property damage claims and 47% on average after an injury claim. These cost increases can last for three to five years, so one year without claims will help you build up trust again with your car insurance company, but it’ll take more time to get the reduced auto insurance prices that good drivers with a clean driving record receive.

Does credit score affect car insurance premiums?

Yes, in most states, a credit-based auto insurance score affects your car insurance costs.

Car insurance companies say there is a correlation between credit and the chances that you’ll file a claim. Insurers say that drivers with higher credit scores file fewer claims, so they receive cheaper car insurance rates.

California, Hawaii, Massachusetts and Michigan ban the use of credit in car insurance cost calculations.


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