Five States with Exceptionally High Auto Insurance Costs

Nowadays, if you watch any television at all in America, there’s a good chance you’ve seen a ton of car insurance commercials. They include car-wrecking villains, talking geckos, cavemen, cheery salespeople, and “mayhem” personified. Auto insurance takes up a large portion of the $4 billion in advertising expenditures made by the insurance sector. Due to increased competition in the industry and a desire to draw in new customers who may be fed up with rising prices and are turning to the Internet to compare insurance quotes, insurance companies are becoming more active with their marketing strategies.

Your location is one of the most crucial elements that is taken into account when calculating your auto insurance rate, along with your driving history, age, and the safety features of your car. Because some locations are perceived by insurance companies as having a higher risk than others, those drivers must pay more for insurance, often much more.

However, isn’t that anti-democratic? Everyone ought to pay the same price for the same service, right? That’s not how insurance firms, though, as seen by the significant differences in auto insurance premiums across the nation. For instance, a driver in Maine pays just $889 year for auto insurance, whereas a driver in Detroit—the most expensive city in the country—pays a staggering $5,941 annually. However, Detroit is not the only city in the United States where motorists must spend a fortune to insure their vehicles. See five states with abnormally high vehicle insurance rates by reading on.

5: The nation’s capital

The District of Columbia is the first entry on our short list of states with abnormally high auto insurance rates; it is not a state at all. However, as residents of the District will attest, it runs like a state, with its own government and a distinct department of motor vehicles from Virginia and Maryland. Great museums, history, and the Cherry Blossom Festival are just a few of Washington, D.C.’s many attractions; however, reasonable auto insurance isn’t one of them. It must be those business lobbyists’ fault!

In terms of cities, Washington, D.C. is actually not that terrible off; it hasn’t recently made the list of the 10 most costly cities, and it is distant from Detroit, which has the highest vehicle insurance costs in the nation. The nation’s capital, however, is still quite expensive, costing an average of $1,866 per year in 2012.

The fact that D.C. is entirely an urban area, where automobile insurance is typically more expensive than it is in a small town or rural area, is the primary factor in the district’s high cost of auto insurance. Why do insurance providers discriminate against city dwellers? Cities are seen as higher dangers due to a number of factors, including their propensity for theft and accident rates. Additionally, cities and the neighboring suburbs are frequently where wealth is concentrated, therefore city dwellers frequently purchase more expensive cars than those who reside in the country. The cost of insurance increases with the cost of the vehicle.

Who is the lowest payer?
Due to its relatively evenly distributed population, which reduces the likelihood of accidents, and the fact that it hasn’t recently experienced many significant natural disasters, Maine consistently ranks as one of the least expensive states in the nation to insure a car, costing just $889 annually [source: Marquand]. Following it are North Carolina ($1,022), Idaho ($1,011), Wisconsin ($987), Iowa ($985), and Idaho ($987).

4. West Virginia

West Virginia would be the Cinderella story if having high auto insurance premiums were a competition, moving up from the middle of the pack to become one of the top five most expensive states in America. West Virginia experienced a remarkable rise in the rankings from 2010 to 2012, moving from 19th in 2010 to 14th in 2011 and finally 4th in 2012. West Virginians have been suffering as a result of the state’s soaring auto insurance costs, which of course no state wants to win.

Insurance prices are always the result of several factors working together. West Virginia, like some of the other states on’s top five list, has had more than its fair share of recent natural catastrophes, such as floods, mudslides, snowstorms, and tornadoes. Although it’s almost certainly a contributing factor, that nearly certainly doesn’t explain why rates are rising in West Virginia on its own. The number of uninsured drivers on the road is another element that is certain to add to the rising rates. About one in seven West Virginia drivers lacked insurance in 2011. Those who do purchase insurance wind up carrying more than their fair share of the burden when tens of thousands of others are driving without auto insurance.

3. Michigan

The impact of the automobile may be felt throughout the entire state of Michigan, which is the state most closely associated with them. In order to encourage driving, Detroit’s streets are wider than those of most cities, and many citizens of Michigan are employed in the Ford and GM facilities. So, it stands to reason that auto insurance would be relatively inexpensive in a location with such a devoted commitment to the automobile, right? Wrong. The average cost of auto insurance in Michigan has stayed over $2,000 per year in recent years, placing the state among the top five in the US for expensive rates.

A state legislation that grants accident victims lifetime access to unrestricted medical benefits is one of the factors contributing to Michigan’s expensive vehicle insurance. That’s fantastic for accident victims, but it can be expensive for the typical driver. Additionally, personal injury protection coverage, which was $145 per vehicle in 2012, is a requirement for Michigan auto owners to purchase as part of their policy.

The recent economic downturn has affected Michigan more severely than other states, and one potential effect of Michigan’s expensive vehicle insurance premiums is that some people may not be able to pay the rates. For instance, in Michigan, 17% of drivers lacked insurance in 2011. Because they have to cover the losses when uninsured drivers cause accidents, this puts pressure on insurance firms and might create a negative feedback cycle that exacerbates the problem.

Detroit Is Not Rockin’
There are several factors contributing to the high cost of auto insurance in the wonderful state of Michigan, but Detroit is the main factor raising the statewide average. The outrageous $5,941 average yearly premium in the Motor City in 2012 was brought on by high levels of crime, uninsured drivers, and unemployment. All of which most likely cause residents of Detroit to express extreme displeasure when they get their monthly insurance bills.

2. Oklahoma

Let’s start with the good news: In Oklahoma, the cost of car insurance decreased on average from 2011 to 2012. But even knowing that Oklahoma is the second-most costly state in the union to insure your automobile doesn’t lessen the pain. Oklahoma is just one of four states where the average cost of a vehicle insurance policy is over $2,000 year, costing an average of $2,047.

When it comes to auto insurance, Oklahoma constantly ranks at the top of the pack, but why? What makes owning a car in The Sooner State so dangerous? The data crunchers at frequently attribute high insurance rates to the prevalence of uninsured drivers, which is a serious issue in Oklahoma. A startling 24 percent of drivers in the state are uninsured, and when they cause accidents, the costs of property damage and medical bills are passed on to other motorists in the form of higher insurance rates. The issue is being addressed by an Oklahoma taskforce, which hopes to reduce the proportion of uninsured drivers from 24 to 14 percent by the year 2017.

Storms and other natural disasters could be another issue. Softball-sized hail, which is the worst kind of storm for cars, blizzards, and tornadoes have all recently wreaked havoc on Oklahoma. All of such losses may be a factor in rising insurance costs.

1. Louisiana

Considering purchasing auto insurance in Louisiana? The Bayou State is by far the most expensive state in the nation to insure a vehicle, so you may want to consider obtaining a new line of credit. According to data from the Insurance Research Council, the average annual cost of auto insurance in Louisiana is a staggering $2,536; this is about twice as high as the national median and almost three times as much as Maine, the state with the cheapest rates at the moment. New Orleans, which is also located in Louisiana, was the third most expensive city in the nation in 2012, with an average premium there costing $3,599 a year.

Why is car insurance so expensive near the bayou? Insurance providers hold the state’s judicial system accountable. In Louisiana, claims must total $50,000 before proceeding to a jury trial; anything less is decided by an elected judge, who is more likely to side with a voting citizen than an insurance company out of self-preservation. In theory, at least. Due to the law, numerous lawsuits are supposedly settled for $49,000, which naturally raises insurance companies’ rates. Loose is the source. Additionally, Louisiana has been hit by the recession just as hard as any other state, which leads to a lot of people driving without insurance out of desperation. According to Brad Bourg of the Bourg Insurance Agency in Baton Rouge, for some people, the choice is between keeping their insurance and putting food on the table.

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