What are the Cheapest States for Car Insurance?
The car insurance industry is full of data and there is little wonder why almost all actuary jobs are in the insurance industry. Whether its statistics about why women drivers are lower risk than males or why texting while driving positively increases the risk of a car accident, mathematicians earn big bucks for compiling and analyzing data all year around. In fact, starting salaries for actuaries in the car insurance industry can exceed $100,000 for college graduates.
Many industry reports are commissioned and used solely to forecast the risk of drivers filing a future claim for calculating car insurance premiums but some of the results offer a great insight to consumers searching for cheap car insurance rates.
One of the most popular cheap car insurance reports is published annually by Insure.com where the company ranks States in order of the average cost of car insurance premiums to come up with a ranking of the most expensive state to insure a vehicle to the state with the cheapest car insurance rates. According to Insure.com the top 10 states with the cheapest car insurance rates were:
Cheapest States for Car Insurance
|State||Average Car Insurance Rates|
Louisiana and Michigan topped the list as the most expensive States for car insurance with average premiums exceeding $2,000 while more popular States such as Florida, New York and New Jersey came closer to the national average car insurance rates of $1,429.26. You can view the whole report at Insure.com
Why is Car Insurance Cheap in some States vs. others?
Car insurance premiums are based on risk calculation and while no single factor will provide a reason why some states are more expensive to insure a vehicle than others its very important to understand average car insurance rates to help determine whether or not your car insurance quotes are inline with reasonable market prices for car insurance policies. The top 2 states for car insurance in this report actually have pretty large factors going against them outside of the risk associated with drivers and/or vehicles including state laws which make car insurance companies exposed to greater liability from litigation and medical expenses.
For example, in Louisiana car insurance companies settle more than almost any state since any claims exceeding $50,000 are sent to jury trail so in order to avoid a trail by jury (obviously trails are expensive and insurance companies in general don’t have the greatest love by citizens) many settlements are reported just under $50,000 and lawyers know this actively seeking damages from all car insurance companies whenever a car accident happens.
Michigan also requires all car insurance companies to offer UNLIMITED medical benefits for LIFE when a person is injured under an insured event so this extraordinary cost which is not required by all other states poses a substantial future risk cost to car insurance policies underwritten for Michigan vehicles and drivers.
How do I get Cheap Car Insurance Quotes?
As mentioned above its extremely important to understand the average cost of car insurance in your state and armed with this knowledge you will be able to determine whether or not you are getting cheap car insurance quotes. However, the idea behind car insurance coverage is to actually have sufficient coverage so premiums should only play one part of your decision making process. Learn about the types of coverage, policy limits and all the details of any policy before engaging in a relationship with a car insurance company.
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