Associated Press Traffic headed out of New Orleans ahead of Hurricane Isaac last August.If you want cheap car insurance rates, it’s best not to live in Louisiana. Or Michigan.
That’s according to a new analysis from Insure.com, an insurance rate comparison site.
The average annual premium in Louisiana is $2,700. Michigan is next with $2,500, followed by Georgia at $2,200. In the New York metropolitan region, Connecticut has the nation’s 11th highest average annual premium at $1,723, New Jersey is 12th at $1,697 and New York is 33rd at $1,369.
The report is based on additional analysis of data provided for Insure.com by Quadrant Information Services, which this year obtained rates for more than 750 models from six big insurers (Allstate, Farmers, Geico, Nationwide, Progressive and State Farm) in 10 ZIP codes per state. That analysis allowed Insure.com to report on the most and least expensive cars to insure, which Bucks reported on this year. Insure.com then averaged the rates for all vehicles in each state to create the state rankings. (The cars were all 2013 models.)
Rates are for a single, 40-year-old man with a clean driving record and good credit who commutes 12 miles to work daily. Policy limits were $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 both collision and comprehensive coverage. The rate includes uninsured motorist coverage.
Ultimately, your own rates will vary based on your driving record, the type of car you drive and other factors, including those that have little to do with your driving history. But the comparative state rankings give an idea of how policies at the state level can affect rates over all, said Amy Danise, Insure.com’s editorial director.
In Louisiana, several factors help to drive up rates, she said. For instance, drivers injured in accidents there tend to file more bodily injury claims than do those in other states. Medical costs have been increasing, so insurers have to pay more for those claims. The state also has significant claims filed under “comprehensive” coverage, which covers damage from natural disasters, like hurricanes.
Michigan, meanwhile, is an “oddball” state when it comes to car insurance, she said, in that auto policies are required to offer unlimited medical coverage for injuries sustained in an accident. Insurers pay the first $500,000 in medical claims, and the Michigan Catastrophic Claims Association pays the rest. All policyholders pay a fee for the association. The fee is $175 per car.
“All of these costs get passed on, in one way or another,” Ms. Danise said.
Meanwhile, less urban states may benefit from overall lower rates because of less traffic congestion and lower accident rates. Maine ranks as the cheapest state, with an average premium of just over $900, followed closely by Iowa at about $1,000. “You don’t have all these cars next to each other crashing into each other,” she said.
So what if you don’t live in a state with lower premiums? You can strive to keep your own driving record as clean as possible, avoiding tickets and accidents that can raise your rates. And you can shop around. Quotes for the same driver can differ by company, she said. You can also choose a car that’s less expensive to insure. In Louisiana, for instance, the cheapest choice would be a Jeep Patriot Sport , while the most expensive would be a Mercedes-Benz S65 AMG sedan.
Do you live in a high-premium state? Do you take any special steps to help keep your premium affordable?
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