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15 States With The Cheapest Auto Insurance

15 States With The Cheapest Auto Insurance

How your location affects your vehicle insurance premiums

Location is an important influence on vehicle insurance costs. Average vehicle insurance premiums by state may differ due to variances in rules and insurance firms’ efforts to determine prices based on these disparities.

For example, drivers in no-fault states like Michigan and Florida frequently pay more for insurance than drivers in other parts of the country.

Auto insurance premiums might be prohibitively expensive for people who lease or buy a vehicle. The average cost of a premium varies significantly by state. Drivers in the five states with the highest average annual vehicle premiums pay about double what drivers in the five states with the lowest average annual auto premiums pay.

There are various reasons for vehicle insurance premium prices to differ. The obvious consideration is driving history, and state rules differ in terms of how much coverage is necessary.

The average yearly cost of automobile insurance in the United States is $3,017. That comes to $251 every month. While some states have far higher rates (see you, Michigan, Louisiana, and Florida).

In this post,15 States With The Cheapest Auto Insurance, we will let you know the 15 states that have managed to keep the lid on auto insurance rates.

15 States With The Cheapest Auto Insurance

15 States With The Cheapest Auto Insurance

Rank State Average rate
1 Hawaii $1,619
2 Washington $1,803
3 Alaska $1,897
4 Idaho $2,010
5 Indiana $2,065
6 Maine $2,201
7 Ohio $2,238
8 Iowa $2,286
9 Massachusetts $2,315
10 Wisconsin $2,346
11 Tennessee $2,348
12 Vermont $2,379
13 Wyoming $2,393
14 Oregon $2,421
15 Illinois $2,498


Why are auto insurance rates more (or less) expensive in some states?

Auto insurance rates can differ significantly from one state to another due to a variety of reasons:

State Regulations: Each state has its own set of insurance laws and rules. Some states have stricter regulations for insurers, impacting pricing. For example, laws like no-fault insurance versus at-fault systems affect claim costs and, consequently, premiums.

Population Density: Higher population density areas often face more traffic and accidents, leading to increased insurance rates. Urban locations tend to have more accidents and thefts, impacting insurance costs.

Accident Frequency: States with more accidents or a higher number of uninsured drivers typically have higher insurance rates due to increased risk.

Weather and Natural Disasters: States prone to natural disasters experience higher insurance rates due to the elevated risk of vehicle damage from events like hurricanes, tornadoes, or wildfires.

Cost of Living: States with a higher cost of living tend to have increased insurance rates as repair costs and medical expenses tied to claims are generally higher.

Insurance Market Competition: The level of competition among insurance companies in a state can impact rates. More competition can lead to lower prices as companies vie for customers, while less competition may keep rates higher.

Legal Environment: States with a history of high-value settlements or lawsuits related to car accidents may have higher insurance rates as companies anticipate potential costs.

Unemployment Rates: Economic factors, such as high unemployment rates, can indirectly affect insurance rates. More unemployment might lead to more uninsured drivers, impacting rates for insured drivers.

These elements, alongside others, contribute to the variations in auto insurance rates across states. Insurance companies evaluate these factors to assess the risk associated with insuring vehicles in specific regions, which then influences the premiums they charge.

To illustrate further, here’s a look at three states where rates are highest.


Michigan’s staggering average annual car insurance cost of $5,766 hits hard for several key reasons:

No-Fault Insurance with Unlimited PIP: Michigan mandates no-fault insurance with unlimited Personal Injury Protection (PIP), leading to higher premiums due to the extensive coverage required.
Additional Coverage Costs: Factors like insurance fraud, legal fees, and healthcare expenses significantly contribute to inflating policy costs, adding to the financial burden for drivers in the Great Lake State.
Expensive Claims: Claims in Michigan tend to be costly. Insurers, in order to remain profitable, are compelled to set higher rates to cover these expensive claims, thereby impacting the overall insurance costs for drivers.


Louisiana’s frequent encounters with natural disasters, particularly hurricanes and flooding, significantly impact car insurance rates in the state. The average annual car insurance cost in Louisiana stands at approximately $4,280 due to the increased risk of vehicle damage from these recurring natural events.

The elevated probability of claims arising from such disasters necessitates higher insurance premiums to cover potential damages, thereby affecting the overall cost of car insurance for drivers in the state.


In Florida, the anticipation of natural disasters, similar to Louisiana, significantly influences insurance rates. The state’s susceptibility to natural calamities like hurricanes impacts the cost of insuring vehicles due to the higher risk of damage.

Moreover, akin to Michigan, Florida also mandates drivers to carry no-fault coverage. This mandatory coverage, combined with the regularity of insurance companies paying out losses due to various reasons, contributes to the average annual insurance rates in Florida, which stand at approximately $3,766. These factors collectively result in insurers adjusting rates to accommodate the increased likelihood of claims and associated costs, thus impacting the overall expense of auto insurance for Florida drivers.

15 States With The Cheapest Auto Insurance

Factors that determine your personal Auto Insurance rate

If you are paying too much more or less than a buddy, it’s most likely due to one of the following reasons:

Below are the several factors that influence an individual’s auto insurance rate:

Driving Record: Your driving history, including accidents, tickets, and claims, significantly impacts your insurance rate. A clean record often means lower premiums.

Age and Gender: Younger drivers, especially teens, generally have higher insurance rates due to their lack of experience and higher likelihood of accidents. Additionally, statistically, young males tend to have higher rates than females in the same age group.

Vehicle Type: The make, model, year, and safety features of your vehicle affect insurance rates. Cars with higher safety ratings and lower repair costs usually have lower premiums.

Credit History: In many states, credit history plays a role in determining insurance rates. Individuals with better credit tend to receive lower premiums as they are seen as less risky to insure.

Location: Your address impacts your rate due to factors like population density, crime rates, and the likelihood of accidents or theft in your area.

Annual Mileage: The more you drive, the higher the chance of an accident. Insurance companies often ask for annual mileage to determine risk.

Coverage and Deductibles: The type and amount of coverage you choose influence your premium. Higher coverage limits and lower deductibles usually mean higher premiums.

Marital Status: Married individuals often receive lower rates as they are considered to be more responsible and less prone to risky behavior on the road.

Occupation: Some insurers consider your occupation as a factor in determining risk. Certain professions might be associated with safer driving habits.

Previous Insurance Coverage: Having continuous insurance coverage without any gaps can sometimes lead to lower rates as it demonstrates responsible behavior.

Insurance companies use these factors, among others, to assess the risk associated with insuring an individual. Each factor contributes differently, and insurers use various algorithms and statistical models to calculate personalized rates based on these elements.

How to Keep Your Car Insurance Rates Very Low

Keeping your car insurance rates low involves several strategies that can help minimize your premiums:

Maintain a Clean Driving Record: Avoid accidents and traffic violations. A good driving history typically leads to lower insurance rates.

Compare Insurance Quotes: Regularly shop around and compare quotes from multiple insurance companies. This can help you find the best rates available.

Bundle Policies: Consider bundling your auto insurance with other types of insurance, such as homeowners or renters insurance, with the same company. Many insurers offer discounts for multiple policies.

Choose Higher Deductibles: Opting for a higher deductible can lower your premiums. However, ensure you can afford the deductible in case of an accident.

Drive a Safe Vehicle: Vehicles with high safety ratings and advanced safety features often qualify for lower insurance rates.

Maintain Good Credit: In many states, insurers consider your credit history when determining rates. Maintaining a good credit score can lead to lower premiums.

Take Advantage of Discounts: Inquire about available discounts, such as safe driver discounts, good student discounts, low-mileage discounts, or discounts for certain professional affiliations.

Drive Less: Some insurers offer discounts for low-mileage drivers. If possible, consider carpooling, using public transportation, or working from home to reduce your annual mileage.

Review Your Coverage Regularly: As your circumstances change, your insurance needs may change as well. Periodically review your coverage and adjust it according to your current situation to avoid overpaying for unnecessary coverage.

Avoid Small Claims: For minor damages that cost less than your deductible, consider paying out of pocket instead of filing a claim. Frequent claims can increase your rates.

Ask About Usage-Based Insurance: Some insurers offer programs that track your driving habits. If you’re a safe driver, this could lead to lower premiums.

Maintain Continuous Coverage: Avoid gaps in your insurance coverage, as continuous coverage history can sometimes lead to lower rates.

By being proactive and mindful of these strategies, you can potentially lower your car insurance rates and save money over time. Always discuss available options and potential discounts with your insurance provider to find the best ways to keep your premiums affordable.

How to change car insurance when moving out of state

Moving to a new state often involves adjusting your car insurance, and the process can vary based on the state’s regulations and insurance company policies. If your current insurer operates in your new state, the easiest approach is usually to contact them and arrange for a new policy. However, this might not always be the most cost-effective option.

Changing states can impact your insurance rates, potentially increasing or decreasing them. It’s wise to explore various insurance options before your move to find the most affordable rates in your new location.

When you’re moving out of state and need to change your car insurance, follow these steps:

Research State Requirements: Insurance requirements vary by state. Research and understand the minimum coverage and any specific insurance regulations in your new state.

Contact Your Current Insurer: Notify your current insurance company about your move. Inquire if they operate in your new state and if they can transfer your policy or if you need to cancel it. They might have partnerships or options available in your new location.

Shop for New Insurance: Research local insurance providers in your new state. Get quotes and compare coverage options and rates from multiple insurers to find the best policy that meets your needs.

Schedule the Change: Coordinate the start date for your new insurance policy to align with your move-out date from your current location. Ensure there are no gaps in coverage during the transition.

Cancel or Transfer Your Current Policy: If your current insurer doesn’t operate in your new state, cancel your policy effective on your move-out date. If they do operate there, arrange for a policy transfer or update your policy with the new address and any necessary changes.

Provide Necessary Information: Be prepared to provide information such as your new address, vehicle registration, driver’s license information, and any changes in circumstances (like a change in your commute distance) to your new insurer.

Complete the Paperwork: Fill out any required forms or documents accurately and promptly to ensure a smooth transition to your new policy.

Obtain Proof of Insurance: Once you’ve secured your new policy, obtain a copy of your new insurance card or proof of coverage. This document may be required when registering your vehicle in the new state.

Register Your Vehicle: Register your vehicle in your new state within the specified timeframe. You’ll likely need proof of insurance to complete the registration process.

Follow-up: After making the change, ensure that your previous insurance company has canceled your policy and that your new policy is active and meets all legal requirements in your new state.

How to update your registration when moving states

When moving states, updating your vehicle registration is crucial to comply with local laws. Here’s what you should do:

Research State Requirements: Understand the specific requirements for vehicle registration in your new state. Each state has its own rules and procedures.

Gather Necessary Documents: Collect essential documents such as your current vehicle title, current registration, driver’s license, proof of insurance, and any required forms provided by the new state’s Department of Motor Vehicles (DMV) or equivalent agency.

Visit the Local DMV: Find the nearest DMV office in your new area. Schedule an appointment if required to avoid long wait times.

Complete Required Forms: Fill out the necessary forms for vehicle registration in your new state. These forms typically include an application for vehicle registration and/or title transfer.

Submit Documents and Fees: Present your documentation to the DMV officer, along with any applicable fees for registration and title transfer. Fees vary by state and vehicle type.

Undergo Vehicle Inspection: Some states require vehicle inspections before registration. Ensure your vehicle meets safety and emissions standards if inspection is mandatory.

Obtain New License Plates and Registration: Once all requirements are met, you’ll receive new license plates and a registration card for your vehicle in the new state.

Dispose of Old License Plates: Some states require you to surrender your old license plates. Follow the local regulations for disposing or surrendering them as necessary.

Update Vehicle Insurance Information: Provide your updated registration information to your insurance company to ensure your policy reflects the changes in your new state.

Keep Proof of Registration: Keep a copy of your new registration and other related documents in your vehicle. You may need these documents for various purposes, such as traffic stops or vehicle inspections.

It’s essential to complete this process within the required timeframe set by your new state. Failure to update your vehicle registration within the specified period could result in penalties or fines. Always consult the DMV or local authorities for precise instructions and timelines to ensure a smooth transition of your vehicle registration to your new state.

15 States With The Cheapest Auto Insurance

States That Have the Cheapest Auto Insurance: conclusion

States with the cheapest auto insurance often share common characteristics that contribute to more affordable rates for drivers. Factors such as lower population density, fewer accidents, and less stringent insurance regulations can influence the cost of insurance premiums.

Additionally, regions with lower costs of living and fewer instances of extreme weather or natural disasters tend to have more economical insurance rates. When relocating to states known for cheaper auto insurance, it’s essential to consider the requirements for updating vehicle registration and insurance to ensure compliance with local laws.

By understanding the specific regulations, gathering necessary documents, and completing the registration process promptly, individuals moving to these states can benefit from more affordable insurance rates while adhering to legal requirements.

Thanks for reading “15 States With The Cheapest Auto Insurance” Also read 

Itohowo Williams has always been an animal enthusiast and has spent more than ten years working in the pet insurance industry in particular as well as other pet-related sectors. An OnePageSEO Expert. The Pet Insurance Nice Guy. Lover of Pet, Crazy for French Bulldog . Currently Working as a Pet Insurance writer at The goal is to provide valuable insights and tips for pet owners seeking guidance in choosing the right pet insurance plan, with a deep understanding of the factors that impact the cost of pet insurance policies in the Pet Insurance World. With a focus on E.A.T. (Expertise, Authority, and Trustworthiness), Williams is a reliable source for pet owners seeking high-quality pet insurance advice to make informed decisions about their furry friend's health and wellbeing. Follow Williams on twitter @

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