Where You Live Has a Huge Effect on Car Insurance Rates

Laws, court rulings and driver behavior mean that someone across a state line might pay double (or half) of what you do.

When it comes to the cost of your car insurance, there are things you can control fairly easily, such as what you drive and how you drive it. And things you can't, such as where you live. In fact, differences in state laws, court rulings and driver behavior mean the insurance bill in one state could be more than double the bill on the same vehicle in another state.

Photo of the Interstate Construction system



Based on data.

This is the fifth year of the study, which gathers quotes from six major insurers in multiple zip codes in all 50 states and Washington, D.C., averaging rates for the 20 best-selling vehicles nationwide. Those models, led by the Ford F-series pickup, represented 40% of the new-car market in the U.S. in 2014.

Rates are based on full coverage for a single, 40-year-old man who commutes 12 miles to work each day. The hypothetical driver has a clean record and good credit. The policy has limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. The rate includes uninsured motorist coverage.

For the second year in a row, Michigan tops the list of the most expensive states, with rates nearly 89% above the national average. It's basically in a class of its own, with an average that’s 31% more expensive than that of the second-costliest state, Montana.

Penny Gusner, consumer analyst for, says the main culprit is the Great Lakes State’s no-fault personal injury system, which provides unlimited lifetime medical benefits to injured motorists. "If someone is seriously injured, these auto insurance benefits could be paying out for decades," she said. Those generous benefits also attract fraudsters who file false injury claims, raising costs even more. And Michigan has a lot of uninsured drivers: 21% (versus a national average of 12.6%), according to the Insurance Research Council. Those free riders raise costs for everyone else.

Second-place Montana has insurance rates that are 44% above the national average. According to statistics from the Insurance Institute for Highway Safety, the Treasure State has the highest rate of fatal accidents in the country. "Auto accidents so severe that they result in fatalities are expensive to car insurance companies, and thus lead to higher premiums for motorists," says Gusner.

At the other end of the cost spectrum is Maine, where the average insurance premium is 39% less than the national average (and a whopping 57% less than in Montana). Although they are both relatively rural states, Maine’s fatality rate is roughly half that of Montana. And only 4.7% of Maine’s drivers are on the road without insurance, according to Insurance Research Council statistics.

Zip codes matter a lot, too. In some cases, the difference between two zip codes in the same state is bigger than between two states with sharply different average rates. Take New York, for example. It's actually a fairly low-cost state, 42nd in the nation with an average annual cost of $1,013. But in Brooklyn (zip code 11226), the average car insurance premium is $3,877, almost four times the state average, according to,. If you want to dig into that kind of detail, check out ’s Average Car Insurance Rates calculator.

Ranking the States: Average Car Insurance Premiums
1Michigan $2,47626Colorado $1,245
2Montana $1,88627Arkansas $1,239
3Washington, D.C. $1,79928New Mexico $1,237
4Louisiana $1,77429Minnesota $1,222
5Florida $1,74230Oregon $1,211
6West Virginia $1,71631South Carolina $1,210
7Connecticut $1,69032South Dakota $1,180
8Rhode Island $1,65633Kansas $1,147
9California $1,64334Hawaii $1,114
10New Jersey $1,59535Missouri $1,112
11Maryland $1,59036Washington $1,110
12Mississippi $1,58437Arizona $1,103
13Delaware $1,54238Nebraska $1,086
14Georgia $1,51939Illinois $1,079
15Oklahoma $1,49640Utah $1,059
16Massachusetts $1,46041Indiana $1,033
17Texas $1,44942New York $1,013
18Alaska $1,41043Virginia $1,008
19North Dakota $1,37744North Carolina $986
20Wyoming $1,37145Vermont $957
21Kentucky $1,34146Wisconsin $930
22Alabama $1,32047New Hampshire $905
 National Average $1,31148Iowa $886
23Pennsylvania $1,30449Idaho $877
24Tennessee $1,26350Ohio $843
25Nevada $1,24851Maine $805

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