Personal Finance News

Study Finds Cheapest and Most Expensive Car Insurance States

For years television advertising has been inundated with spots from car insurance commercials, each claiming to save Americans the most amount of money. Setting aside the fact that not every company can be the cheapest, one major factor in your rates is simply where you live. With that in mind, the personal finance site WalletHub recently ranked the states with the cheapest and most expensive car insurance rates.

To compile their report, WalletHub used a standardized driver profile to obtain quotes from 20 major insurance companies in 47 states (Alaska, Hawaii, and Michigan along with the District of Columbia were all excluded) and sampling at least six cities in each state. This stand-in driver was said to be a 30-year-old male with no driving violations and good credit. They also gave this fictional driver a 2010 Toyota Corolla, which they apparently drive about 15,000 miles a year. As for the policies, WalletHub also selected as close to a standard set of coverage as they could, including $25,000 per person in Bodily Liability Coverage, $25,000 per person in Uninsured Motorist Bodily Injury Coverage, $25,000 per accident in Property Damage Liability Coverage, and the state minimum in Personal Injury Protection.

Overall the state with the cheapest car insurance was Iowa. That was followed by Vermont, Nebraska, Wyoming, and South Dakota. Not surprisingly, on the other side of the list, New York was found to have the most expensive car insurance. Other pricey states included Florida, New Jersey, Rhode Island, and Louisiana.

Not only did WalletHub list the states where the most affordable car insurance could be found they also ranked national insurance companies — meaning those operating in at least 20 different states. Coming in first place with the cheapest coverage was Progressive. They were followed by Geico, State Farm, The General, and Nationwide in the top five. Rounding out the top 10 were Liberty Mutual, Allstate, Safeco, Travelers, and Farmers.

Accompanying WalletHub’s rate findings is a survey of Americans regarding their car insurance. Among some of the notable tidbits from this study, 54 million people admitted that they don’t understand their policy or car insurance in general. Also interesting is that two-thirds of insured individuals said they preferred coverage from national companies instead of local ones and that 63 million Americans say they’ve never switched insurers. Finally, asked whether they thought it was fair that their zip code could impact their policy rates, respondents were split 50-50.

While most Americans may not have the luxury of letting car insurance rates dictate where they live, there may be other ways they can save. One simple option is to purchase a car that’s less expensive to insure. Additionally insured individuals may find savings by switching companies — especially if their new insurer offers extra discounts they qualify for. With car insurance adding up to a major expense for many, it’s often worth pursuing any savings you can get without sacrificing coverage.