When shopping for affordable car insurance, it helps to know where you can get the best rates. If you're lucky, you live in one of the top 10 cheapest states for car insurance. But even if you're not in one of these states, it's important to understand how your location influences costs and how you can otherwise reduce your auto insurance price.
Which States Offer the Cheapest Auto Insurance in 2024?
We reviewed full coverage with 50/100 bodily injury insurance across all states and found the following top 10 lowest auto insurance premiums by state:
| Rank | State | Average Monthly Premium |
|---|---|---|
| 1 | Hawaii | $103 |
| 2 | Idaho | $108 |
| 3 | Maine | $118 |
| 4 | Vermont | $118 |
| 5 | North Carolina | $121 |
| 6 | New Hampshire | $127 |
| 7 | Mississippi | $128 |
| 8 | Washington | $129 |
| 9 | Ohio | $131 |
| 10 | Tennessee | $132 |
| Avg. premiums are weighted by zip code population sizes. Data accurate as of August 1, 2024 | ||
What Factors Make These States Have Lower Auto Insurance Rates?
Your car insurance rates aren't just based on your driving history. They are also influenced by where you live and features unique to that location, such as natural disasters and crime. Unfortunately, these risks typically result in higher costs for consumers residing in these areas despite their good driving history.
Consider the following risk factors for higher rates:
- Natural disasters: If you live in an area historically prone to catastrophic weather conditions, expect insurance rates to reflect this. Insurers in Louisiana know that the hurricanes that hit this area often damage cars. Likewise, Oklahoma insurers factor in the potential cost of your car getting picked up in a tornado.
- History of claims: Rates increase when a specific demographic files more claims. So, if people in your region historically file more claims, insurers increase costs to recoup what they recently paid out.
- Crime rates: Car theft can be expensive for insurance companies that pay for repairs or total loss values. If you live in an area where car thefts are common, your rates may be higher.
- Traffic density: More cars driving in less space can mean more accidents. That's why folks in Los Angeles traffic may see higher rates than someone driving along Wyoming highways.
- Carrier competition: Competition between multiple insurers in the same area decreases rates. If your area has several auto insurance carriers covering it, you may find better prices as they try to outbid each other for your business. But if you live somewhere with limited carrier options, rates could be higher.
Living somewhere without extreme weather conditions, low history of claims, low crimes, reduced traffic, and increased carrier competition can result in lower car insurance rates. And even if you live somewhere with factors that may increase costs, like natural disasters or increased crime, shopping around for quotes can help you find the best price.
How Do State Regulations Impact Auto Insurance Premiums?
Drivers are legally mandated to carry some auto insurance in every state except New Hampshire. However, other types of state regulations can impact auto insurance premiums, which may or may not work in the consumer's financial favor. This issue was recognized as early as the 1980s when the General Accounting Office released the Auto Insurance: State Regulation Affects Cost and Availability report.
Each state mandates its coverage levels. This generally consists of a combination of:
- Property damage liability
- Bodily injury liability
- Personal injury protection (PIP)
- Uninsured/underinsured motorist coverage
The coverage amount may vary, reducing costs in states with lower coverage requirements. No-fault states that require PIP can have higher rates overall, meaning at-fault states may be cheaper.
State regulations within the autobody and towing industry may also indirectly affect costs. When a state sets a minimum pay rate for autobody professionals, insurance companies must pay at least that much on claims. Likewise, towing and storage rates for a vehicle that has been in an accident can be limited by the state. This can increase costs for insurers or protect them from gouging, allowing them to pass on lower costs to consumers.
Is Moving to a Low-Cost Insurance State Worth the Savings?
Moving to a low-cost car insurance state may not be worth the savings because factors that reduce car insurance may affect other living expenses in that area. For example, Hawaii currently has the lowest average annual car insurance premium. But it's tied for third in the most expensive U.S. states to live in overall. Moving to Hawaii to save on car insurance would mean increasing many of your other expenses.
Instead, if you are considering a move, research car insurance costs. Any potential savings should be viewed as a bonus during the expensive process of moving. This investigation can also give you a heads-up if you are moving to a state with more expensive insurance costs.
How Can You Maximize Savings on Auto Insurance in These States?
You may already live in one of the top 10 states for affordable car insurance, but you can further reduce these costs by combining them with auto insurance discounts.
Some of these potential discounts include:
- Good driver: Insurers often have programs that reward good drivers with lower rates or a reduced deductible. These may be based on a set period of driving history without accidents. Your insurer may also offer a device that tracks your driving to reward good behavior.
- Veterans/students/seniors: If you are a member of a specific group, such as veterans, students, or seniors, your insurer may offer a discount on your insurance cost.
- Bundling: When you combine your car insurance policy with another policy, such as renters insurance or homeowners insurance, carriers often offer a lower price.
- Increase your deductible: You can lower your monthly premium payments by increasing your deductible amount. Of course, this means you will pay a higher deductible if you get in an accident, but in the meantime, you pay less.
- Reduce your coverage: Review your policy to see if you can reduce your coverage. For example, if you have an older paid-off vehicle, carrying comprehensive coverage to repair accidental damage to it may no longer make sense.
To see how much you could save through these discount options, regardless of your location, get quotes. It's free and only takes a few minutes to enter your info and shop multiple carriers simultaneously. Insurance prices change regularly, so find the right insurance at the best price when you compare often.