Jessica Sautter has a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around auto insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Reviewed by Natasha McLachlan
Content Writer Natasha McLachlan

UPDATED: Jan 10, 2022

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When it comes to insurance premiums for vehicles, each state has their own rates based on a number of different factors. Let’s find out the top 5 states with highest car insurance rate in the USA where people pay highest premium for auto insurance which is higher than national average.

The five lowest states in terms of auto insurance premiums are New Hampshire, Iowa, Idaho, Ohio and Maine. It may seem rather obvious why four of the states are present on the list as they are mostly rural with fewer chances for accidents to occur. Ohio however is rather out of place given its large cities such as Cleveland and Cincinnati, yet it is near the bottom of the list when it comes to auto insurance premiums.

But what of the top five states in terms of paying the highest insurance premiums for vehicles? It may surprise you to know that the top states seemingly have little in common which each other apart from the considerably higher auto insurance premiums. Yet, in each case there are justifications why the rates are so high.

Top 5 Most Expensive States for Car Insurance Premium:

5 States with Highest Car Insurance Premium

What follows are the top five states that have the highest auto insurance premiums. The premiums are averages by all vehicles that are registered in the state and reveals quite a bit about how insurance companies set their rates.

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No. 5 – Louisiana

It may seem a little surprising at first that a state with a traditionally low cost of living as compared to most other states would have such high insurance premiums. However, Louisiana is roughly 33% above the natural average despite being a mostly rural state with seemingly many of the advantages that would invoke lower insurance premiums.

Louisiana has a lower crime rate, fewer vehicles, and less congestion which leads to fewer accidents when compared to most US states. Yet on average Louisiana drivers pay about $1,774 per year on car insurance premiums.

This is mostly because Louisiana has proven to be vulnerable to hurricanes which can damage many vehicles by flooding, high winds which toss debris and falling trees. Although Hurricane Katrina was over a decade ago, the ramifications of that and previous hurricane events have led insurance companies in the state to charge considerably higher premiums as compared to most states.

No. 4 – Delaware

One of the smallest states in terms of land is also near the top of the list when it comes to auto insurance premiums. Delaware’s average car insurance premium is a remarkable 41% above the national average. This is despite the fact that Delaware has very low liability requirements by law for personal, bodily injury and damage to property insurance.

Yet, what really raises up the rates is that Delaware is densely populated and sits between Washington D.C and Baltimore, two high population cities. This combination means that with so many commuters and people on the road in a relatively small area the accidents really pile up. It is the increased danger from being on the road under these conditions that makes Delaware one of the worst states in terms of auto insurance premiums.

No. 3 – New York

Perhaps it’s not so surprising that New York is near the top with an average insurance premium nearly 42% above the national average. There are many reasons for the high rates which start with the population density of the New York City area which contributes to the many accidents that occur. In fact, the borough of Brooklyn is second only to Detroit when it comes to auto insurance rates for cities.

It is the New York City area which drives up the rates for the rest of the state which is mostly rural in nature. However, there are other factors such as the recent Superstorm Sandy which caused a lot of flood damage to vehicles that revealed the vulnerability of the area to strong Atlantic storms and hurricanes.

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No. 2 – Rhode Island

With rates roughly 45% above the national average, the smallest state in the US has one of the biggest premiums for auto insurance. There are a couple of important reasons why the rates are so high, first is that the city of Providence which dominates the state is one of the top cities for collisions. So, the chances of being involved in an auto accident are considerably higher than in most other parts of the country. Read here how high risk drivers can avail affordable car insurance.

The second reason is more interesting in that nearly 15% of the driving population does not have auto insurance. This means that the rates for those who do have insurance are driven upwards. There is no singular reason why so many Rhode Island drivers have decided to not get auto insurance, but whatever the reason it is having a powerful effect on the rates of those who do.

No. 1 – Michigan

As hinted at earlier with the stunning auto insurance rates for the city of Detroit, Michigan has far and away the highest premiums in the country that are an astounding 136% above the average. An average Michigan resident pays upwards of $2,500 per years on their vehicle insurance which is an incredibly high rate.

There are a few reasons as to why the rates are so unbelievably high. The first is that a very high number of Michigan drivers have no auto insurance to speak of which naturally drives up the rate. With a smaller pool of drivers contributing to the insurance companies, it means that the uninsured are covered in a sense which forces the rates to go upward. Detroit for example has rates that are roughly 45% higher than the rest of the state which means that they are over 181% above the national average.

However, the other reason is that Michigan alone includes unlimited lifetime personal injury protection which is arguably the main reason why the car insurance is so expensive. When you consider that a younger driver may have their lifetime medical expenses covered for decades to come, it is little wonder that the insurance rates are so expensive.

The Bottom Line – What’s Your Take?

If you are living in any of the states with highest car insurance premium mentioned above, then unfortunately you are most possibly paying higher car insurance premium than national average. However, higher premium results higher down payment which means more out of pocket cost. But we certainly can help you to get coverage for your car at lower or no down payment at all. Click here to learn more about it.

Although the top five states will vary some over the years in terms of their average cost of auto insurance, it is safe to say that the risk factors which drives cost will still be present for the foreseeable future.