Where does your state rank? Insure.com recently ranked all 50 states based on average annual car insurance premium in 2012. Way at the bottom of the list, the lowest average premium was $934; meanwhile the most expensive state averages at almost triple that amount with an average annual premium of $2,699.
To figure out the average annual premium for each state, Insure.com commissioned Quadrant Information Services to provide auto insurance rates for more than 750 car models from Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm in 10 ZIP codes per state. Rates were then averaged for all vehicles in each state to create the rankings.
A number of factors go into pricing car insurance, and those factors vary even more from state to state. According to Barbara Marquand, some of those factors include the number of insurers competing for business, driving conditions, the portion of drivers who are uninsured, and the way state insurance systems are set up.
To see the complete ranking of all 50 states and the District of Columbia, click here.
Click "next" to see the 3 least expensive and most expensive U.S. states for car insurance.
51. Maine
Average Annual Premium: $934
Under $1,000 a year for car insurance? It's not only possible, but common, for drivers in Maine, whose average annual premium is $934.
Maine is a rural state without much city driving, which can contribute to the low rates. The state also has tight restrictions on young drivers to keep accidents and rates down.
50. Iowa
Average Annual Premium: $1,028
Iowa is ranked 50th among the most expensive states for car insurance. Factors such as low population density and rural sensibility are credited for the state's low average annual premium of $1,028.
"I don't think we're as rushed to do things," observes Paul Pohlson, president of the Independent Insurance Agents of Iowa and vice president of Ramsey Weeks in Grinnell, Iowa. "Maybe we don't have as much road rage."
49. North Carolina
Average Annual Premium: $1,085
Close behind Iowa is North Carolina, ranking 49th in average annual car insurance premiums with an average of $1,085.
3. Georgia
Average Annual Premium: $2,155
Towards the top of the list is Georgia, ranking as the third most expensive state for car insurance. According to Victor Hamby, president of the Professional Insurance Agents of Georgia, the market in the Atlanta metropolitan area was "ultra competitive" from about 2003 to 2010. However, carriers underpriced the market, causing things to take a turn when claims caught up with them.
"We're seeing carriers increasing rates on auto insurance for the first time in seven or eight years, anywhere from 2 to 12 percent," says Hamby.
2. Michigan
Average Annual Premium: $2,520
The state with the second highest average annual premium is Michigan. One reason could be that Michigan is the only state that guarantees unlimited, lifetime personal injury protection (PIP) benefits for treatment of injuries from a car accident.
The injured person's car insurance company pays out the first $500,000 for medical treatment. Any expenses above that threshold are reimbursed by a state-created nonprofit called the Michigan Catastrophic Claims Association. A portion of everyone's premium includes an assessment from the association, which this year is $175 per vehicle.
Not helping the matter are rising PIP medical claim averages, which more than tripled to $44,138 in 2012 from $13,617 in 2000, according to the Insurance Institute of Michigan.
1. Louisiana
Average Annual Premium: $2,699
Topping off the list is Louisiana with the highest average annual car insurance premium. According to Insure.com, compared to the rest of the country, Louisiana drivers who get in accidents file more bodily injury claims than drivers in other states.
Louisiana also has a high rate of comprehensive claims, and a great portion of people filing insurance claims are hiring attorneys. In addition, Louisiana's judicial system lawsuits involving claims under $50,000 go before judges instead of juries. According to Marquand, some observers say elected judges are more likely to side with local people than insurance companies.
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