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Why Are Auto Insurance Rates Different In Some States?

Every wonder why Auto Insurance Rates differ in some states?

Car insurance costs far more in some states than others. Insurance industry experts reports that average annual premiums range from $934 in Maine to nearly $2,700 in Louisiana. Rates also exceed $2,000 in Georgia, Michigan and Oklahoma. A variety of factors influence prices in each state.

State Laws

Rules about insurance and driving vary from one state to another. Some legislatures have established high caps on auto-related medical claims. Insurers reacted by raising premiums so that they could fully compensate injured motorists. States also require different amounts of liability coverage; this has a significant impact on the minimum cost of insurance.

Young and elderly motorists frequently cause traffic accidents. Some states test these drivers more rigorously when they obtain or renew their licenses. If a state confirms that vehicle owners have adequate eyesight and driving skills, the roads are safer and people make fewer insurance claims. This allows insurers to charge lower premiums.

Risk Factors

Severe weather and other natural disasters also affect car insurance rates. This is particularly true in the southeastern U.S. Drivers can expect to pay more in regions that regularly experience floods, hurricanes or tornadoes. Natural disasters primarily affect the price of comprehensive auto coverage.

People tend to pay larger premiums in states with high property crime rates. Insurers must consider local theft and vandalism statistics when they issue quotes. States with numerous urban areas often experience more crime. Some drivers avoid the extra cost by installing anti-theft devices; this usually results in an insurance discount.

A few of the states with cheap auto insurance simply have less traffic. For example, there aren’t many large cities in Vermont or Maine. This greatly reduces the number of traffic accidents. Motorists may need to avoid the occasional farm animal or pothole on a country road, but they travel at low speeds and encounter few intersections.


Drivers typically receive lower quotes when more auto insurance companies have to compete for customers. Favorable climates, regulations and legal systems attract insurers to certain states. A competitive market may also encourage them to offer extra bonuses, such as roadside assistance or pet injury coverage.

It may seem unfair that some drivers have to pay much more for insurance than motorists in other states. However, it’s important to realize that people who pay higher premiums are more likely to make claims and recoup some of their money. State law may ensure that they also receive more compensation.

Hope you enjoy this hash of why car rates vary from state to state!



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