What State Has the Cheapest Car Insurance Rates? | Gabi

When shopping around for insurance we always want to find the cheapest rate that’s still offering us a high-quality product. The rates we get are impacted greatly by where we live. What state has the cheapest car insurance rates? Stay tuned to find out!

Why do insurance rates differ per state?

Insurance companies take many factors into account when calculating your insurance premium. Quite a few of those factors are state-specific. 

Some of the key factors include:

• Legal Requirements – the minimum coverages can vary greatly by state which can have an impact on your insurance premium. Michigan is currently one of the most expensive states when it comes to auto insurance. They have an unlimited medical benefit coverage requirement to cover automobile accident injuries.

• Population and urban areas – statistically, people living in densely populated states can expect a higher insurance premium due to a greater likelihood of their vehicle being involved in an accident, theft, vandalism, etc.

• Climate – People living in states with a history of severe weather, like Louisiana or Florida, can expect to pay a higher premium due to a greater chance of hurricanes, flooding etc., leading to a greater number of comprehensive claims. Extremely cold winters, in states like Michigan, also contribute to the higher insurance premium as traffic accidents are more likely to happen on slippery, ice-covered surfaces.

• Competition – Big competition on the market ultimately leads to competitive prices. People living in states where there is a high number of insurance companies to choose from, tend to see a lower insurance rate. States with a smaller selection of insurance companies face an increased likelihood of one of those companies having a monopoly on the market, meaning they can dictate much higher prices.

What are the cheapest states?

Our data finds that the top 10 least expensive states for car insurance in 2021 are:

1. Vermont: Vermont, having the second-lowest population in the United States makes the cut due to fewer people driving around. Meaning a lesser chance of being involved in an accident.

2. Idaho: A reasonably high competition among insurance companies, combined with a low population density account for the great insurance offers customers can expect in Idaho.

3. Iowa: Due to a low number of uninsured motorists and on average shorter distances when commuting to work, Iowa residents enjoy a lower than average rate.

4. Maine: Multiple factors contribute to Maine’s average insurance premium being one of the lowest in the US. Its rural areas, a low percentage of uninsured drivers and a reasonably big competition has insurance carriers bend over backward to ensure their rates are as low as they can be.

5. Wisconsin: Similarly, Wisconsin’s semi-rural areas and high competitiveness among insurance companies result in residents being able to get some very eye-catching offers.

6. Ohio: Despite having quite a high population, Ohio’s infrastructure, consisting of a healthy balance of rural and urban areas, ensures that traffic jams are avoided. This greatly decreases the likelihood of being involved in an automobile accident.

7. Wyoming: Limited traffic on Wyoming’s rural roads, a low population density, and a small fraction of uninsured motorists are just a few reasons why the state’s residents can enjoy rates that are on average 48% lower than the national average

8. Indiana: The state requires only basic liability in Indiana. Together with low crime and vandalism statistics, this factor has earned Indiana a stop in the top ten states with the lowest insurance rates.

9. Illinois: Despite quite a high population density, Illinois has a reasonably low percentage of uninsured motorists and high competitiveness between insurance companies.

10. Montana: Living in a state with the third-lowest population density in the country sure has its advantages. Additionally, Montana has a low percentage of uninsured drivers, meaning residents can expect some very attractive rates.

What other factors impact auto premium?

Apart from your state, the amount you pay for your car insurance is dictated by many different factors. Some of them you have control over, like your driving record, the vehicle you are driving, or coverage limits. Others are beyond our control. Things like age (seniors and younger inexperienced drivers tend to see a higher rate). Gender can also be a factor, as men under 30 tend to get involved in a higher number of accidents. Find out more about how your insurance is calculated here.

How to make sure I get the best price?

Whether you live in one of the cheaper or more expensive states, there are still some savings you can find. The key to finding the best coverage is knowing your options.

Of course, this can be done by visiting multiple websites and inputting the information over and over in order to get your quotes. But Gabi is here to help! Our main goals are to save not only money but also time, which is an asset you can never buyback. With Gabi, you can get quotes from over 40 carriers in a matter of minutes! All we need is your current coverage details. 

Related Articles:

Insurance Comparisons by State

Which Car Insurance Company Has the Cheapest Rates?

The Best and Worst Insurance Comparison Sites 2021