“There are many reasons why car insurance rates vary from one state to another. Although drivers can't control many factors that make car insurance more expensive, drivers can still get cheaper rates if they are good drivers, cause no accidents or drive less " - R. Rabichev, IMC's CEO
LOS ANGELES (PRWEB) November 26, 2020
Compare-autoinsurance.org has launched a new blog post that presents the reasons why car insurance rates vary from state to state and where drivers pay the most expensive premiums.
For more info and free car insurance quotes, visit https://compare-autoinsurance.org/why-do-car-insurance-rates-vary-from-state-to-state-and-which-states-are-the-most-expensive/
Before people move to a new state, they consider the cost of living in their new location. Among the house prices, property taxes, and sales taxes, people also consider the price of car insurance. In the US car insurance prices can vary wildly from state to state.
The reasons why car insurance rates differ between states are the following:
- Rating factors and rules. States decide which methodology insurance companies can use to set their rates. Some states don’t factor in age, gender, or credit history. Furthermore, there are 13 states that require state approval before rates can increase.
- Personal injury protection. PIP, also called no-fault insurance, covers the medical expenses for the driver and its passengers after an accident, regardless of who caused it. PIP can also pay for lost wages, rehabilitation, or funeral expenses. However, drivers are still required to buy bodily injury liability and property damage liability. For this reason, no-fault states have higher insurance costs than at-fault states.
- Uninsured Motorist (UM) and Underinsured Motorist (UIM) insurance. UM bodily insurance coverage pays the medical expenses of a driver injured by a hit-and-run driver or by a driver who has no insurance. UIM bodily injury covers a driver who got hit by someone who doesn’t have enough coverage. 19 states and the District of Columbia require UM alone or both UM and UIM coverage.
- The number of uninsured drivers. Uninsured drivers are more likely to commit hit-and-run accidents. Insurance companies are required to pay claims when uninsured drivers cause accidents. However, these payments are spread among insured drivers. For this reason, insurance rates are more expensive in states with more uninsured drivers.
- Population density. Accidents are more likely to happen in crowded urban areas. Also, dense areas have a higher incidence of crimes such as car theft, break-ins, and vandalism. Car insurance rates increase with population density.
- Age of drivers. States with the highest percentages of drivers either under 25 or over 65 are more likely to charge more for car insurance. Teenagers, young adults, and senior drivers are considered to be high-risk drivers for various reasons.
The most expensive states for car insurance in 2020 are the following:
- Michigan: $2,409 annually. A unique no-fault insurance system coupled with a high number of uninsured drivers makes Michigan so expensive. However, insurance rates might go down thanks to a bill adopted in July. Michigan drivers are now allowed to have options when it comes to coverage levels for minimum liability insurance requirements and some personal factors not related to driving can no longer be used to determine rates.
- Florida: $2,178 annually. In Florida PIP insurance is mandatory. Also, there are many young students and older drivers. Finally, Florida has the highest number of uninsured drivers in the country.
- Maryland: $2,090 annually. Drivers in this state are required to buy bodily injury and property damage liability, PIP, uninsured motorist coverage, and underinsured motorist coverage. Also, Maryland ranks at number three when it comes to the most car accidents in the US.
- Georgia: $1,910 annually. Georgia has some of the most accident-prone roads in the country. Drivers in Georgia also drive expensive vehicles that are costly to repair.
- Delaware: $1,806 annually. A high population density combined with a large number of older drivers, makes Delaware one of the most expensive states for car insurance. Also, Delaware's healthcare costs reached the top three in the country.
- Nevada: $1,760 annually. Residents of Nevada are overly litigious when they get involved in car accidents. Also, they drive expensive cars that cost a lot to repair.
- South Carolina: $1,674 annually. Mandatory uninsured motorist coverage and a high percentage of older drivers are the reasons why South Carolina’s premiums are so high.
- Louisiana: $1,535. 40 percent of all drivers in Louisiana hold only the state minimum insurance, while 15 percent have no insurance at all. This means that more than half of Louisiana's drivers have little or no protection at all. For this reason, when an accident happens, victims rely on the court for adequate payout. Hurricanes and floods force the premiums to rise, too.
- Missouri: $1,519 annually. This state mandates uninsured motorist coverage. Almost one in seven people is driving without insurance.
- Texas: $1,506 annually. The second most populated state is filled with many teenage and young adult drivers. Also, it has the fourth-highest cost for healthcare in the country, so insurance companies pay hefty medical claims.
For additional info, money-saving tips and free car insurance quotes, visit https://compare-autoinsurance.org/
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