This State Has the Most Expensive Auto Insurance — Here’s Why

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There are certain states with much higher insurance costs than others. Here’s where you can expect to pay the most, and why that’s the case. 

Auto insurance premiums can vary considerably based on where you live. In simple terms, drivers in certain states are more likely to get into accidents or file insurance claims, and premiums reflect that. With that in mind, here’s a look at which state has the most expensive auto insurance, and what factors can make auto insurance more or less expensive in a particular state.

Which state has the most expensive auto insurance?

To be sure, the state with the most expensive auto insurance somewhat depends on who you ask. There are some states that regularly appear at the top of most lists, including Michigan, Louisiana, Florida, and New York, but the order can vary considerably based on the criteria used in the research.

Having said that, according to research by CarInsurance.com, Florida has the most expensive car insurance, with an average annual premium of $2,560. Following in close second is Louisiana, with a $2,546 average. Delaware, Michigan, and California round out the top five, although premium costs there are all significantly less than the two highest-cost states.

What makes auto insurance so expensive in certain states?

Auto insurance premiums are a reflection of the insurance company’s expected losses. If an auto insurer anticipates a higher volume of claims in a certain state, it will charge more for insurance to make sure its business works.

There are several specific reasons why auto insurance in certain states is more expensive. Just to name some of the most significant:

Population density: If a state is more densely populated, it will have more cars per mile of roadway, which can lead to more accidents. I grew up in New Jersey, the most densely populated state, and this was a big reason insurance has an above-average price tag. New York is in the same category. On the other hand, while Florida isn’t one of the most densely populated states, it typically has a lot of tourists on the road at any given time, which creates the same effect on its roadways.Natural disasters: Florida and Louisiana are two of the most hurricane-prone states in the nation. This creates a higher probability of storm-related insurance claims.Cold winters: States like Michigan and New York see a lot of snow. It is considerably more dangerous to drive on snow than on dry roads, or even in heavy rain.Uninsured motorists: A high percentage of uninsured motorists in a state increases the likelihood that an insurer will have to pay a claim even if you didn’t cause the accident. Florida has an uninsured motorist rate of 20.4%, one of the highest in the U.S.No-fault insurance laws: If you live in one of the 12 states with no-fault auto insurance laws, you’d have to file an injury claim with your own insurer, regardless of who caused the accident. Florida and Michigan are both on this list.

The bottom line

The cost of auto insurance depends on a lot of other variables, in addition to where you live. For example, your particular vehicle, your age and marital status, your driving record, and even your credit score can play a role. However, there are some states where you’re likely to get quoted significantly higher premiums because driving there represents a greater risk to the insurance company.

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