Why Do Auto Insurance Rates Vary From State To State?

You might find yourself asking this question if you’ve just moved from one state to another or if you know someone in another state who’s insurance premium is significantly higher or lower than yours. For instance, if you live in New York you might find that your friend in Pennsylvania is given a cheaper car insurance quote than the one you are given. Or you may notice that ever since you moved from Georgia to Florida, your rates have sky rocketed, however, you are not alone. According to the National Association of Insurance Commissioners the most expensive auto insurance rates were found in D.C., Louisiana, New Jersey, Florida and New York. The least expensive were in Kansas, Wisconsin, North Carolina, Maine and Indiana.

There are many factors that are responsible for the difference in the cost of auto insurance premiums among states. One factor to blame is the population. If the area in which you live is densely populated there will be more cars on the road and will increase the likelihood that an accident will occur. If there are more accidents, there will be more claims filed. To an insurance company, claims equal money. The more claims that are filed, the more money they will have to pay out. If they have to spend more, you will too.

Another factor that influences auto insurance quotes is the crime rate in your area. It is possible that you may have an elevated crime rate if you live in a densely populated area. It’s unfortunate that crime rates are affected by the size of the population, however, it’s also inevitable because the more populated an area is, the more likely that crime will occur. In this case, crimes for concern are those such as auto theft and vandalism. You might be thinking your high priced auto insurance rate is the real crime here, but let’s not run anyone over!

The price tag on litigation services in your state can be yet another determinate in your overpriced insurance quote. If your state has a complicated legal system or the cost of litigation is higher in your state than another, your insurance rates will reflect it. This can sound unfair and you’re probably disappointed that you lost this case, but if you ever need to sue anyone or if you’ll ever be sued, your insurance company wants to make sure they’re not the ones paying for it – you can bank on it!

Tornadoes, hurricanes and earthquakes, oh my! While these natural disasters are destructive enough, they can also destroy your premiums. Extreme weather conditions cause more accidents and as we all know, more accidents equals more claims equals more money.

Other factors that can have an effect on your car insurance are the cost of living as well as the minimum amount of liability coverage you are required to have for personal injury and property damage in your premium. It’s all about the Benjamins, baby. The greater these values are, the more expensive your rate will be.

Don’t give up driving just yet! You still have many insurance coverage options! While you might already be living in or moving to a state with expensive auto insurance rates (and though you may not be willing to relocate for a cheaper premium) it might be comforting to know that there are places that can help you compare auto insurance quotes in your area and find the cheapest rate for you. Whether you need rates for California auto insurance, Nevada auto insurance or Texas auto insurance, it’s all at your fingertips so what are you waiting for?

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