Cheapest States for Auto Insurance in 2023

If you’re searching for cheap car insurance, where you live may significantly impact your monthly or annual rates. Certain states have lower averages for state-wide car insurance rates, while others have higher rates for auto insurance coverage.

The states with the cheapest car insurance rates often have lower required coverage levels or a lower cost of living. Conversely, the states with the most expensive car insurance often have higher required coverage and a higher cost of living.

You don’t have to be discouraged when you research car insurance rates by state. You may be able to find cheap rates even if you live in a state that has a higher average for car insurance costs. One of the best ways to find cheap car insurance is to compare multiple auto insurance quotes online.

Comparing car insurance quotes gives you a better idea of how much you’ll pay for coverage based on your specific situation. Some companies may offer much cheaper rates for the coverage you’re looking for, and you can avoid overpaying for your car insurance policy.

How much are auto insurance rates by state?

Car insurance costs are based on several different factors. You may get cheaper rates because you have a clean driving record and are in your mid-40s. Someone else may have more expensive car insurance because they don’t have the best credit score.

Most car insurance companies in the U.S. consider several factors when determining a person’s car insurance rates. These factors include age, gender, location, marital status, driving history, credit score, car make and model, and coverage type.

Where you live will impact what you pay for coverage, but it’s not the only factor that matters. The table below shows car insurance costs in each state in the U.S.

As you can see, the average cost of car insurance by state varies significantly. Additionally, the type of car insurance coverage you choose will impact how much you pay for coverage. For example, if you choose a liability-only policy that simply meets your state’s car insurance requirements, you will pay less than if you choose a full coverage auto insurance policy.

While knowing the average cost of car insurance in your state is helpful, you should still shop online to find a policy that works best with your budget. Compare quotes from multiple car insurance companies to ensure you do not pay more than you need to for coverage.

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What type of auto insurance do I need in my state?

Each state has different requirements for coverage. You may only need a liability policy or more robust coverage before you can get behind the wheel. All U.S. states require drivers to provide proof of financial responsibility if they’re ever in an accident. Most states use car insurance as a way for drivers to prove their financial responsibility.

You may not have to purchase car insurance if you live in New Hampshire or Virginia. Still, both states offer auto insurance as a way for drivers to remain safe on the road. Aside from New Hampshire and Virginia, all states require the following liability auto insurance coverage:

• Property damage liability: Property damage coverage helps if you cause an accident and damage someone’s car or personal property. Property damage liability will pay for all the property damage you caused up to a specific dollar amount.
• Bodily injury liability: Bodily injury liability helps if you cause an accident and one or more individuals are injured. Bodily injury coverage will cover one person’s or multiple people’s injuries up to a specific dollar amount.

While all states require liability, some states have additional coverage requirements drivers must meet before getting behind the wheel. These coverages include one or more of the following:

• Personal injury protection (PIP): PIP insurance helps with medical bills associated with a covered accident. PIP also helps with lost wages and funeral costs due to a covered accident.
• Medical Payments (MedPay): MedPay coverage helps with medical bills, like hospital stays, surgeries, and visits to the doctor, associated with a covered accident.
• Uninsured/underinsured motorist coverage: Buying uninsured motorist coverage allows your car insurance company to pay for damage someone caused to your vehicle if that person does not carry proper auto insurance coverage in your state.

Knowing what your state requires before purchasing a car insurance policy is important. The table below shows each state’s coverage requirements.

If your state only requires liability, you can still purchase PIP, MedPay, and uninsured or underinsured motorist coverage to help protect you when you’re on the road. Each state also offers additional coverage for drivers who feel it would be helpful.

Do I need full coverage auto insurance in my state?

No state requires drivers to carry a full coverage policy before getting behind the wheel. Still, purchasing full coverage could be helpful, depending on your situation.

Full coverage car insurance includes comprehensive and collision coverage. Comprehensive insurance pays for repairs to your vehicle if something like wild animals, theft, vandalism, or extreme weather damages it. Collision insurance pays for repairs to your vehicle if you cause an accident and damage your car. Without a full coverage policy, you could end up paying for repairs to your car out of pocket.

You should consider buying full coverage if you drive a new car, an expensive car, or a car with a loan or lease. You may be required to have one if your car is under lease and the contract specifies it. But even if you aren’t, the added protection could help you save thousands of dollars if you’re ever in a car accident.

What are auto insurance add-ons?

Many companies offer additional coverage options that help drivers stay safe on the road. Some of the most common add-on coverage options in the U.S. include:

• Roadside assistance: Roadside assistance coverage helps if you’re stranded and in need of help. With roadside assistance, you can typically get towing services, lockout services, fuel delivery, flat tire repair, and more.
• Rental car reimbursement: If you have to rent a car because yours is in the shop after a covered event, rental car reimbursement ensures your insurance company will reimburse you for any money you spend on a rental car up to a specific dollar amount.
• Rideshare insurance: Drivers who work for rideshare companies like Uber often have gaps in coverage because they drive personal vehicles. Buying rideshare insurance helps drivers ensure they’re safe as they do their jobs.
• Gap insurance: Gap insurance pays you the difference between what you owe on your vehicle and your car’s actual cash value (ACV). When you buy gap insurance, you will never be upside down on your car loan.
• New car replacement: New car replacement coverage promises to replace your car with the same make and model if yours is totaled during a covered accident.
• Accident forgiveness: If you purchase accident forgiveness coverage, your car insurance rates will not increase even if you’re involved in an accident and must file a claim.

Gap insurance or new car replacement could be extremely helpful if you drive a new car. Additionally, if you work for a company like Uber or Lyft, you may need rideshare insurance to ensure you’re covered throughout your workday. Different coverages keep you safe depending on the nature of your life, schedule, and occupation.

Why do auto insurance rates vary by state?

It may seem odd that insurance rates vary from one state to another. Still, many factors impact the cost of car insurance in each state.

State Regulations

One of the main reasons car insurance rates vary is that there are different minimum auto insurance requirements by state. Some states require lower levels of coverage to drive legally, while others require that drivers carry higher levels of coverage.

For example, some states only require drivers to carry liability coverage for bodily injury and property damage. At the same time, other states also require coverage like personal injury protection, medical payments, and uninsured or underinsured motorist coverage.

Population

Some states with fewer people and more space between drivers have lower rates for coverage than states with a denser population.

For example, New York and California have much higher car insurance rates than states like Idaho and North Dakota. Because the latter states have fewer people, they statistically have less opportunity for accidents and car insurance claims.

What factors impact my auto insurance rates?

While where you live is important in determining your monthly or annual rates, several factors ultimately impact how much you’ll pay for coverage. For example, some of the factors most car insurance companies consider when determining a person’s car insurance rates include:

• Age: Teens and young adult drivers pay more for car insurance because they have less experience and pose more risk on the road. Learn about finding cheap auto insurance for teenagers here.
• Gender: Women tend to pay lower rates for car insurance than men since men file more claims, are involved in more accidents, and are statistically more likely to drive recklessly.
• Marital status: If you’re married, you will pay less for car insurance than single people. Married people often make fewer claims than those who are single.
• Driving history: Your driving history significantly impacts your car insurance rates. If you have a clean driving record with no blemishes, you can expect lower rates than someone with an accident, traffic ticket, or DUI on their record. 
• Car make and model: The type of car you drive matters concerning car insurance. If you drive a sports car or a luxury vehicle, you’ll pay more for coverage than if your vehicle is older and slower. 
• Credit score: Believe it or not, bad credit can be worse in car insurance rates than a DUI. If you have a good credit score, you can expect to pay less in monthly or annual rates. 
• Coverage type: Your car insurance coverage impacts your car insurance costs. The more coverage you have, the more you’ll pay for your policy.

Even if some of the factors in your life are less than ideal, you may be able to find cheap car insurance rates in your state. The best way to find cheap coverage is to compare car insurance quotes from several companies in your area. Comparing quotes will help you determine which car insurance company offers the coverage you need at a price that works with your budget.

What is a tort state?

The majority of states in the U.S. are tort states. In a tort state, drivers are financially and legally responsible for property damage and medical expenses related to a car accident that’s their fault. Your car insurance will pay for these things up to a certain dollar amount in a tort state. Additionally, you could pay for it out of pocket if you do not have proper or enough coverage.

What’s a no-fault state?

As the name implies, fault does not take precedence in a no-fault state. Instead, car insurance policies pay for damages and injuries regardless of who caused the accident. The no-fault U.S. states include:

• Florida
• Hawaii
• Kansas
• Kentucky
• Massachusetts
• Michigan
• Minnesota
• New Jersey
• New York
• North Dakota
• Pennsylvania
• Utah

If you’re buying no-fault auto insurance, you’ll need liability insurance, and you may need additional coverage. Check with your state’s department of motor vehicles if you have questions.

What’s a no-pay, no-play state?

In a no-pay, no-play state, car insurance is essential. You could get in serious trouble if you don’t have proper coverage.

No-pay, no-play states have strict rules on coverage. If you are in an accident that someone else causes and you don’t have coverage, that other driver’s car insurance will not pay for repairs to your vehicle or medical costs associated with the accident. Instead, you’ll have to pay out of pocket.

The no-pay, no-play states in the U.S. include:

• Alaska
• California
• Indiana
• Iowa
• Kansas
• Louisiana
• Michigan
• Missouri
• New Jersey
• North Dakota
• Oregon

You must carry proper car insurance if you live in a no-pay, no-play state. Still, even if you don’t live in one of these states, you could get in a lot of trouble if you cause a car accident and don’t meet your state’s requirements for auto insurance coverage.

Shop online and compare quotes to find coverage that works for your situation without paying too much in monthly or annual premiums.

Which states have the cheapest auto insurance rates in the U.S.?

If you’re looking for cheap auto insurance, you may be happy to learn that certain states offer coverage options that cost much less than the national average. Some of the cheapest U.S. states for car insurance include:

You will also likely find cheap car insurance in Alaska, North Carolina, Washington, Tennessee, and North Dakota.

Which states have the lowest possible auto insurance rates?

The states listed above have the lowest car insurance rates on average when considering state-wide premiums. However, some states have extremely cheap coverage in specific ZIP codes that are much lower than the rates listed above. These states include:

• New York: $468 annually or $39 per month
• Massachusetts: $495 annually or $41 per month
• Wisconsin: $505 annually or $42 per month
• Ohio: $516 annually or $43 per month
• Indiana: $521 annually or $43 per month

Certain areas and ZIP codes can offer cheaper rates for many reasons, like low crime rates, fewer people in the area, and less traffic.

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Which states have the most expensive auto insurance rates in the U.S.?

Unfortunately, some states in the U.S. are known for their higher-than-average car insurance rates. The most expensive states in which to purchase car insurance in the U.S. include:

Additionally, you will also have expensive car insurance rates if you live in Colorado, New Jersey, South Carolina, Texas, or Washington, D.C. 

Which states have the highest possible auto insurance rates?

Similar to states with the cheapest possible coverage, some states have certain ZIP codes or areas with extremely high coverage rates. These states include:

• Michigan: $16,397 annually or $1,366 per month
• New York: $15,851 annually or $1,321 per month
• Missouri: $10,332 annually or $861 per month
• Illinois: $10,121 annually or $843 per month
• Nebraska: $8,922 annually or $744 per month

If you live somewhere with higher crime rates, more traffic and traffic congestion, or a denser population, you can expect to pay higher car insurance rates. 

Will auto insurance rates continue to increase?

There’s no way to know what will happen with car insurance rates in the future. Still, experts predict rates will continue to increase because of specific circumstances.

For example, natural disasters are on the rise globally. Because of things like hurricanes, floods, and fires, insurance rates continue to increase. If you live in an area where natural disasters are somewhat prevalent, you may experience higher car insurance rates. 

Still, you can do your best to find cheap coverage. As stated before, shop for quotes online to compare and determine which company works best for you. As you compare quotes, you’ll learn how much you can expect to pay for coverage for your specific vehicle. 

Will moving to a new state increase my auto insurance rates?

If you move to a new state, your car insurance rates will change. Still, you won’t know how much you’ll pay for coverage until you get quotes.

You may move to a state that costs more for car insurance because there’s more traffic or a higher likelihood you’ll get in an accident and need to file an auto insurance claim. On the other hand, it’s also possible that you’ll end up in a state with lower car insurance rates for a few different reasons.

If you feel like what you pay for car insurance rates is too much, there are a few things you can do to try and lower your monthly or annual rates.

Get Discounts

Research different companies to learn which auto insurance discounts each company offers. Some of the most common car insurance discount opportunities include:

• Accident-free discount
• Defensive driving discount
• Safe driver discount
• Good student discount
• Military discount
• Senior discount
• Bundling discount
• Safety device discount
• New car discount
• Usage-based car insurance discount

Discounts can help you save up to 25% on car insurance coverage. 

Increase Your Deductible

You can choose a higher auto insurance deductible for car insurance to get cheaper rates. However, you want to ensure you’ll be able to pay your new, higher deductible if you’re ever in an accident. 

Choose Lower Levels of Coverage

Lastly, you can lower your car insurance coverage to maintain a cheaper monthly or annual premium. Of course, the more coverage you have on your policy, the more you’ll pay for your coverage.

Don’t lower your coverage if you know you need it. For example, if you have a full coverage policy on a vehicle you are still paying off, you should not lower your coverage to get cheaper rates. Instead, shop online and compare quotes to see if you can find cheaper coverage. 

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Cheapest States for Auto Insurance: The Bottom Line

Your auto insurance cost by state depends on where you live. If you live in a state with a higher average for car insurance rates, you can expect to pay more for your auto insurance policy. 

Still, you should be able to compare car insurance quotes to find the cheapest possible coverage in your area. While comparing quotes takes time, you’ll be happy you took the time to do so. Comparing quotes can help you save hundreds of dollars on car insurance coverage. 

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