Top 5 Cheapest States for Car Insurance Rates

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Finding affordable car insurance can feel like rolling the dice. And while the cost can vary widely from company to company, where you live can also greatly impact rates. So it can be helpful to know if you’re living in a state that offers affordable car insurance.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
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Click here to read our full review for free and apply in just 2 minutes. Here are the five cheapest states for car insurance, and what drivers need to know to get the best rate.Five states with the cheapest car insurance ratesDepending on where you live, drivers may be able to get the minimum coverages required for less than $40 a month, or a standard coverage policy for less than $300 a month. For context, the average car insurance rate in the U.S. is $251 per month as of 2023.Here are the cheapest states for car insurance, based on the lowest rates for minimum liability:StateAverage Monthly Rate: Minimum LiabilityAverage Monthly Rate: Standard CoverageAverage Monthly RateWyoming$30$221$199Iowa$30$211$191Hawaii$35$148$135South Dakota$35$297$268Montana$36$254$230Data source: Motley Fool Money research; calculations by author. Western states (Wyoming, Hawaii, and Montana) and midwestern states (Iowa and South Dakota) make up the entirety of this list, icing out northeast and southern states. And interestingly, the third-ranked state (Hawaii) is a no-fault state, which typically have higher premiums. That’s because no-fault states require drivers to file a claim with their own insurer if they’re injured in a car accident, regardless of who was at fault.You should note, however, that the minimum coverages will vary from state to state, so the rates there don’t necessarily translate to an apples-to-apples comparison for the amount of coverage you’ll actually get.Need a new car insurance policy, but you’re not sure where to start? Check out our list of the cheapest car insurance companies of 2024.How insurers set car insurance ratesOne of the most frustrating things about the insurance industry is that the costs can vary so widely because insurers consider so many factors when setting rates. And the car insurance industry is no different here. Auto insurers typically consider factors like:Driving history: Having accidents or a DUI, for example, can raise your rates.Age: Older drivers tend to be safer drivers.Gender: Women tend to get into fewer accidents than men.Car make and model: Some cars have a better safety history, or safety features, than others.Desired coverages: Minimum coverage will always be the cheapest option.ZIP code: Some areas may have a statistically higher risk of vandalism, theft, or even accidents.Credit: Many insurers weigh drivers’ risk of getting into an accident by looking at their credit. Only a few states (California, Hawaii, and Massachusetts) do not use credit-based insurance scores to set rates.The best car insurance companies will give you the best coverage for the lowest price. And while saving the most money upfront may be an important factor, it shouldn’t necessarily be the only one you consider when shopping for car insurance.Living in the five cheapest states for car insurance can help drivers score lower rates, but that doesn’t mean they have to move across state lines to access lower rates. And if you’re willing to put a bit of time into gathering multiple quotes, you’ll be able to strike the balance between affordability and coverage.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

Finding affordable car insurance can feel like rolling the dice. And while the cost can vary widely from company to company, where you live can also greatly impact rates. So it can be helpful to know if you’re living in a state that offers affordable car insurance.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

Here are the five cheapest states for car insurance, and what drivers need to know to get the best rate.

Five states with the cheapest car insurance rates

Depending on where you live, drivers may be able to get the minimum coverages required for less than $40 a month, or a standard coverage policy for less than $300 a month. For context, the average car insurance rate in the U.S. is $251 per month as of 2023.

Here are the cheapest states for car insurance, based on the lowest rates for minimum liability:

Western states (Wyoming, Hawaii, and Montana) and midwestern states (Iowa and South Dakota) make up the entirety of this list, icing out northeast and southern states. And interestingly, the third-ranked state (Hawaii) is a no-fault state, which typically have higher premiums. That’s because no-fault states require drivers to file a claim with their own insurer if they’re injured in a car accident, regardless of who was at fault.

You should note, however, that the minimum coverages will vary from state to state, so the rates there don’t necessarily translate to an apples-to-apples comparison for the amount of coverage you’ll actually get.

Need a new car insurance policy, but you’re not sure where to start? Check out our list of the cheapest car insurance companies of 2024.

How insurers set car insurance rates

One of the most frustrating things about the insurance industry is that the costs can vary so widely because insurers consider so many factors when setting rates. And the car insurance industry is no different here. Auto insurers typically consider factors like:

• Driving history: Having accidents or a DUI, for example, can raise your rates.
• Age: Older drivers tend to be safer drivers.
• Gender: Women tend to get into fewer accidents than men.
• Car make and model: Some cars have a better safety history, or safety features, than others.
• Desired coverages: Minimum coverage will always be the cheapest option.
• ZIP code: Some areas may have a statistically higher risk of vandalism, theft, or even accidents.
• Credit: Many insurers weigh drivers’ risk of getting into an accident by looking at their credit. Only a few states (California, Hawaii, and Massachusetts) do not use credit-based insurance scores to set rates.

The best car insurance companies will give you the best coverage for the lowest price. And while saving the most money upfront may be an important factor, it shouldn’t necessarily be the only one you consider when shopping for car insurance.

Living in the five cheapest states for car insurance can help drivers score lower rates, but that doesn’t mean they have to move across state lines to access lower rates. And if you’re willing to put a bit of time into gathering multiple quotes, you’ll be able to strike the balance between affordability and coverage.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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