Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Sep 21, 2020

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Here's what you need to know...

  • It’s illegal to drive without some form of car insurance coverage
  • Adding collision and comprehensive coverage raises an auto insurance premium
  • Your driving record and credit history can impact your monthly premium

Driving without auto insurance is a dangerous tactic. Doing so risks the lives of other motorists and can be financially crippling in the event of an accident.

Finding affordable auto insurance is still possible, even with a poor driving record. In many cases, the state a driver is living plays a large role in determining an auto insurance premium.

If a driver is facing a prohibitively high premium, moving to a different state may help him find more affordable car insurance coverage.

Start comparing affordable car insurance quotes for FREE! Enter your zip code above to find quotes in your area!

Table of Contents

States with Best Rates

Every state has varying legal requirements that affect auto insurance rates. For example, minimum coverage standards can make insurance more expensive in some states, and less expensive in others.

Determining which states have the most affordable auto coverage requires factoring in these regional regulations.

In March 2011, Daily Finance conducted a national survey to discover the cheapest car insurance rates.

Daily Finance’s survey averaged auto insurance rates using a 40-year-old driver with a 12-mile commute to work.

The study also factored in $100,000 in total liability coverage, $300,000 in total medical coverage and $50,000 for personal property damage.

  • Vermont placed first with an average annual premium of $995
  • South Carolina came in second at $1,095 annually
  • Maine placed third at $1,126 yearly
  • Michigan was dead last at $2,541 a year for the same coverage
  • The total difference between first and last place is 255 percent
  • National average premium for auto insurance is $1,429.26, according to Automobile.com

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Variations in Coverage

The type of auto insurance coverage a driver plays a large role in determining the annual and monthly premium.

The more extensive the policy, the more the driver pays in terms of premium.

For example:

  • Minimum coverage to drive legally in a given state usually affords a driver the lowest premium available
  • Adding collision and comprehensive coverage raises an auto insurance premium
  • Collision coverage pays for an owner’s vehicle in the event of an accident
  • Comprehensive coverage pays for damage sustained in an accident involving a non-driving event. For example, a tree landing on a driver’s car while the vehicle sits in the driveway falls under comprehensive coverage

Minimum Coverage Requirements

Minimum coverage refers to the basic auto insurance policy a driver needs to have to operate a motor vehicle legally in a given state.

Insurance companies break minimum coverage down into three categories:

  • Bodily injury coverage for a single injured person
  • Bodily injury coverage for all persons injured in a single accident
  • Property damage liability coverage

At publication, the following states have the lowest minimum coverage requirements:

  • Florida is the cheapest in the nation at $10,000/$20,000/$10,000
  • Ohio ranks second with minimum requirements of $12,500/$25,000/$7,500
  • Pennsylvania and California tie for third with coverage requirements of $15,000/$30,000/$5,000
  • The most expensive minimum coverage requirements are in Wisconsin. Drivers in that state must carry minimum auto insurance of $50,000/$100,000/$55,000

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Uninsured Motorists Affecting Rates

The total percentage of a state’s uninsured motorists greatly affects prevailing auto insurance rates within that state.

A small state with fewer drivers can have a lower percentage of uninsured motorists.

For example:

  • As of 2009, Mississippi has the highest percentage of uninsured drivers at 28 percent, according to the Insurance Research Council
  • Mississippi ranks seventh in the nation in most expensive auto insurance policies, as of March 2011
  • As of 2009, Maine and Massachusetts have the lowest percentages of uninsured motorists at 4.5 percent
  • Maine ranks third in Daily Finance’s survey of the cheapest insurance policies in the United States and Massachusetts ranks 17th

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Driver Insurance Factors

A variety of factors can influence a driver’s auto insurance premium regardless of state requirements.

These factors, including driving record and history of traffic violations, can make even a minimum policy more expensive than average.

  • The age of a vehicle plays little role in determining minimum coverage rates, according to MSN Money
  • For example, as of September 2011, a vehicle built in 1993 costs between $360 and $817 to insure minimum coverage standards in Mississippi. A vehicle built in 2005 costs between $344 and $810, according to MSN Money
  • A driver with a poor road record could pay hundreds to thousands of dollars more for auto insurance than a driver with a better road record

Manipulating Coverage Amounts

Changing the values of a driver’s deductibles can help lower the annual car insurance premium.

A deductible is the amount of money a driver pays in the event of an accident before the insurance company extends coverage.

For example, a driver with a $1,000 deductible on her collision insurance pays a lower premium than a driver with no collision deductible

  • An insurance company takes a lower risk when creating a policy with high deductibles. The driver pays a lower premium because it’s less likely the insurance company pays for damages if an accident occurs
  • A driver takes on increased risk with a high deductible insurance policy. Having a $1,000 deductible may keep the annual premium low, but offers little in the form of actual coverage
  • Only use an affordable insurance deductible. If a driver doesn’t have $1,000 to pay towards vehicle damage, it doesn’t make sense to have a deductible that high

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References:

  1. https://www.libertymutual.com/auto/car-insurance-coverage/collision-insurance
  2. https://www.statefarm.com/insurance/auto/coverage-options/uninsured-motor-vehicle-coverage
  3. http://www.insurance-research.org/
  4. http://teendriving.aaa.com/MA/supervised-driving/licensing-and-state-laws/
  5. https://www.geico.com/
  6. https://www.esurance.com/info/car/the-pros-and-cons-of-high-deductibles