7 of Most Expensive States for Car Insurance

A guest post by Nick Simpson –

Car insurance isn’t just something that’s nice to have; it’s required by each of the 50 states if you want to operate a motor vehicle. For some, car insurance is a necessary evil; it’s an added expense on top of already-tight budgets. Other people recognize the value and protection that it provides, and don’t mind paying for it.
To make things even more complicated, insurance rates can vary greatly from one state to the next. Here’s a list of some of the most expensive states to insure your car:

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1. Louisiana. Year after year, Louisiana tends to be either #1 or #2 in terms of the most expensive states for car insurance. There are a couple of reasons why premiums are so high in the land of Jazz and Cajun food. First of all, jury trials in Louisiana are only available on claims of above $50,000. That means many insurers settle out of court, usually at $49,999. Add to the fact that Louisiana’s road infrastructure is one of the worst in the country, and you can begin to see why they’ve got insurance problems.
2. Michigan. Vying for the top spot is Michigan. The birthplace of the automobile is also one of the most expensive states to insure that automobile. Michigan has a mandatory requirement that auto insurance provide lifelong medical care for the injured parties in an accident, regardless of their own policy limits. This “Personal Injury Protection” requirement pushes prices into the stratosphere. Add in the high unemployment rate (Michigan has never fully recovered from the post-9/11 recession, and was even further devastated after the housing crisis) with so many uninsured motorists, and prices have remained high.
3. Oklahoma. Liability is a required coverage in the Panhandle State. The high liability minimums are required to cover bodily injury as well as property damage. In addition, the state’s insurers levy heavy penalties against those who allow their coverage to lapse, as well as severe penalties for driving without having a proof of insurance. These factors have pushed rates up steadily in the state for years.
4. Montana. This western state is pretty uptight about insurance overall. If you’re caught driving without insurance, you can get a three-month jail sentence. Do it several times and you can lose your license for good. In addition, Montana considers all new drivers as “high risk” – not just those who have multiple accidents in their history. New drivers can provide proof of having completed a driver’s education course to get a bit of a discount, but rates are still higher than in most other states.
5. California. The nationwide average for accidents that are caused by uninsured drivers is 14%. In California, a full third of accidents are caused by uninsured drivers. What that means is that drivers carry uninsured coverage, so that their insurance is going to make the payments regardless of who is at fault. This means that the rates in California continue to rise, at almost the rate that the number of residents does. It’s that growing population – one in eight Americans lives in California – and you wind up with millions of accidents and insurance claims in that state each year.
6. South Dakota. Like some of the other top states, South Dakota has some of the highest coverage minimums. Their bodily injury, accident liability, and property damage minimums are higher than all but two other states. This has shown a steady rise in premiums over the past several years.
7. New Mexico. New Mexico’s minimum coverages are fairly high, near those of South Dakota. Only their property damage minimum is less than South Dakotas. New Mexico is also one of the states that allows insurers to base your auto insurance premiums, in part, on your credit history. During tough economic times, credit histories get worse and insurance costs therefore increase – which is what’s happened in the past few years in New Mexico.

If you live in one of these states, it’s important that you do your research when you’re getting ready to buy a car. Find out which cars will cost you the most, and which ones will get you an insurance break.
You also need to talk to your insurer to find out what kinds of discounts are available. Often, you can realize substantial savings on your car insurance if you have multiple vehicles, multiple drivers on the policy, or if you bundle your auto insurance with other insurance policies.

Nick Simpson is Social Media Coordinator at Fred Loya Insurance. Fred Loya provides general car insurance as well as unique services catered specifically to customers in multiple states. Car insurance in Colorado and auto insurance in California are two areas where they have excelled in recent years.