Some factors are likely to affect how much you pay for your car insurance premiums, including your driving record, marital status, your age, gender, your credit rating, the model of your car, and your address. Safe driving and maintaining a good driving record will help you save money by maintaining low premium rates. On the other hand, accident claims will see your premiums rates sky-rocket, especially if the crash reports indicate you were responsible. Other factors that could affect your auto insurance premium rates include geography, occupation, education, and the distance you drive to work. Also, the number of miles you drive per year, years of driving experience, whether you use your vehicle for personal or business operations, car insurance history, theft protection plans, and whether you have more than one car or multiple drivers may have an impact on your premiums.

Car Insurance Premium Rates by State

Let’s put aside all the other factors listed above and let us consider only one of them: geography. Geography is primarily your location. It matters a lot as far your car insurance rates are concerned. The state you live in will have a direct consequence on the insurance premium you will pay monthly, quarterly, or semi-annually, depending on your selected payment plan.

The annual study by confirms that the state you choose to live in will no doubt affect your insurance rates. Two states, Michigan and Maine, have quite a lot in common. Both are rated as good summer vacation destinations, great for hunting and outdoor adventures. Also, both have average yearly household earnings just marginally below the national income average.

However, when it comes to car insurance rates, the margin difference is huge. Michigan ranks high at the very top of the list, having the most expensive auto insurance rates in the country, while Maine, takes to the very bottom of the list when comparing car insurance rates by state.

For the fourth time in a row, Michigan tops the list with an average insurance rate of $2,394, triple the amount of insurance rates in Maine, which come to an average insurance rate of only $864 according to the July 2017 study.Following Michigan in the list are Louisiana and Connecticut, with average rates of $1921 and $1897 respectively. The study puts Maine at the very bottom with the lowest rates. Just above it, are Ohio and Idaho, with averages of $919 and $942 respectively. Michigan is, therefore, the most expensive state to insure a car in while Maine is the state that provides cheap auto insurance coverage countrywide.

Most Expensive and Least Expensive Insurance by State

So, why the high insurance rates in Michigan? Many factors contribute to this skyrocketing insurance rate. One, Michigan maintains a no-fault insurance system that necessitates that car owners should buy personal injury protection (PIP) coverage without limits on how much it pays towards the medical expenses in case the policyholder and household residents are harmed in an accident. PIP coverage also extends to passengers without a PIP cover. Insurance fraudsters and many uninsured drivers also keep premiums rates high in Michigan since the roads are generally busy with traffic, increasing more risks of an accident.

By comparison, Maine does not require car owners to purchase PIP coverage. The state is rural, quiet, and has excellent weather, resulting in less traffic congestion. The auto insurance market in the state is less regulated, unlike in Michigan. The insurance providers can tailor their coverage options to target different market segments hence making the rates more lucrative for many drivers. These are just some of the factors that keep car insurance premiums low in Maine.


by: Dennis Hung