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Auto Insurance Costs: Where Does Your State Rank?

Last Updated Mar 14, 2011 5:54 PM EDT

“The rankings demonstrate how factors like state laws and the judicial system can be the driving force behind high rates,” says Amy Danise, senior managing editor of Insure.com. After Auto insurance costs Michigan, where the average rate is $2,541 a year, the second-highest rates are in Louisiana, where drivers pay an average of $2,453. Three other states had average rates above $2,000 a year: Oklahoma, Montana, and Washington, D.C.

Only Vermont ($995) averaged below $1,000. But South Carolina at $1,095 was not far above that mark. Both states encourage competition among auto insurers.

The high rates are roughly correlated with the proportion of uninsured drivers in a state, often in violation of state law. Uninsured drivers still have accidents, and their liability and personal injury costs are passed on to the rest of the state’s drivers through higher insurance rates. In Oklahoma, nearly one-quarter of drivers on the road are uninsured. Economically hard-hit Michigan had 17% of drivers with no insurance and Louisiana 12%. “It’s an economic problem. They just can’t afford the rates,” says Marc Eagan, president-elect of the Independent Insurance Agents Brokers of Louisiana.

Both the most and least expensive states also have locally-specific stories:

Michigan is the only state that guarantees unlimited personal injury protection payments to people injured in auto accidents. Insurance companies pay up to $480,000 in each case, plus up to three years of lost wages. A state fund chips in on higher settlements. But assessments for that fund also add to rates.

Louisiana’s judicial system tends to return large jury verdicts in cases involving auto accident injuries, according to insurance agents in that state. That means bigger payouts from insurance companies and thus higher rates.

Oklahoma has weird weather. It is one of the worst areas for tornadoes. And a storm last year dropped softball-sized hail on Oklahoma City. Widespread damage claims for battered cars helped push rates up.Auto insurance costs Vermont (above) has lots of rural territory and very little traffic congesion. And with a fairly low level of lawsuits, competing insurers offer policies there.

To see how your state ranks, here is the full list of states and average insurance costs for each:

1. Michigan, $2,541

2. Louisiana, $2,453

3. Oklahoma, $2,197

5. Washington, D.C., $2,146

6. California, $1,991

7. Mississippi, $1,896

8. New Mexico, $1,896

9. Arkansas, $1,836

10. Maryland, $1,807

11. North Dakota, $1,794

12. Connecticut, $1,786

13. Rhode Island, $1,747

14. Wyoming, $1,714

16. South Dakota, $1,707

17. Georgia, $1,670

18. New Jersey, $1,663

19. West Virginia, $1,633

20. Kentucky, $1,629

21. New York, $1,627

22. Minnesota, $1,614

23. Washington, $1,584

24. Missouri, $1,563

25. Indiana, $1,518

26. Colorado, $1,508

28. Delaware, $1,489

29. Florida, $1,476

30. Nebraska, $1,470

31. Pennsylvania, $1,468

34. New Hampshire, $1,334

35. Massachusetts, $1,328

37. Alabama, $1,306

40. Illinois, $1,290

41. Arizona, $1,280

43. Virginia, $1,237

45. North Carolina, $1,154

47. Tennessee, $1,146

48. Wisconsin, $1,128

50. South Carolina, $1,095

Vermont bridge photo from Flickr user dougtone Michigan car photo from Flickr user turtlemom4bacon

  • Auto insurance costs

Jerry Edgerton, author of Car Shopping Made Easy, has been covering the car beat since Detroit companies dominated the U.S. market. The former car columnist for Money magazine and Washington correspondent for Business Week, Edgerton specializes in finding the best deals on wheels and offering advice on making your car last.

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