The Top 5 States with the Lowest Car Insurance Rates
Various factors, including the number of major city centers and the number of uninsured drivers, affect car insurance rates across states.
The state you live in plays a large part in the cost of your insurance. While insurance rates have been rising consistently year after year, some states continue to keep their premiums low. While there are other factors that affect the cost of your car insurance premiums, your location can make a huge difference too. For example, drivers in Michigan pay almost three times as much as drivers in Maine.
This mainly has to do with the amount of coverage each state legally requires. States like New York and Michigan, which require Personal Injury Protection, have higher average insurance rates than states not requiring this additional coverage. Other factors like population density, weather patterns, and driver demographics can also play a part in your state’s average insurance costs. Based on 2020 numbers compiled by Insure.com as well as US News and World Report, here are the states that have the most affordable insurance rates.
1. Maine $912
Maine has consistently had some of the cheapest car insurance rates in the country over the past five years, and 2020 is the second year the Pine Tree State has taken the top spot. One of the reasons why Maine’s car insurance rates are so low is because there are very few uninsured drivers in the state. Maine also isn’t very densely populated, which generally reduces the risk of traffic incidents. Many insurance companies compete here for a relatively small amount of business, which keeps insurance rates low.
2. New Hampshire $985
Just over the border from Maine, New Hampshire has the second-lowest car insurance rates in the country. New Hampshire is very similar to Maine in that they both are largely rural with low population densities, and they both have many established insurance companies competing for business.
One thing that makes New Hampshire interesting, however, is that they don’t require drivers to have car insurance. This makes them one of only two states in the US to lack this requirement, with the other one being Virginia. However, they do require that drivers prove their financial responsibility in the event of an accident, which motivates most drivers to purchase car insurance either way.
3. Ohio $1,034
Ohio is one of the most densely populated states in the US, and is home to several large cities including Columbus, Cincinnati, Cleveland, Akron, and Toledo. Although the state is well-developed and sees higher volumes of traffic than other states on this list, insurance prices stay low due to plenty of competition. Hundreds of local and national providers give Ohio residents plenty of choice and affordability. Although Ohio does see snowstorms in the winter and the occasional tornado, serious weather events are rare and keeps prices low. Ohio’s insurance requirements are also on the lower end, and they only require drivers to carry property damage and bodily injury liability coverage.
4. Wisconsin $1,049
Wisconsin is another state with consistently low insurance rates over the past few years, although prices have gone up slightly. Wisconsin is very similar to Ohio in terms of weather, population density, and competition, which all contribute to the state’s low rates. Wisconsin also doesn’t require drivers to carry much coverage. Each driver needs $10,000 in property damage liability coverage, as well as bodily injury liability of $25,000 for one person and $50,000 for two people.
5. Idaho $1,062
Idaho is known for its beautiful mountain ranges and potato farms, and since the state is mostly rural, car insurance prices are very affordable. Idaho has been one of the top five states for affordable car insurance for the past five years. As with Maine and New Hampshire, the low volume of drivers and lack of large metropolitan areas minimize the risk of traffic accidents, thus enabling insurers to keep prices down.
Idaho also has a very low rate of uninsured drivers, as over 90% of drivers carry insurance policies. When more drivers carry policies, insurance companies can keep prices down. Idaho does require drivers to carry uninsured/underinsured motorist coverage, which is different from the other states on this list.
Despite high car insurance prices in states like New York, Michigan, and Florida, there are still states where you can find an affordable car insurance policy. There are many reasons why these states have lower car insurance rates—many have low population densities, don’t require their drivers to carry much insurance, and have plenty of insurance carriers to increase competition. It also helps to have more drivers insured to reduce the financial risk for everyone out on the road.