Michigan tops list of most expensive states for car insurance

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Michigan, Louisiana and Oklahoma consistently top lists of the most expensive states for car insurance. Photo Credit: W. Robert Howell/Wikimedia Commons/CC-BY-SA

Due to varying state regulations, the cost of car insurance varies from state to state, with some states being quite economical and others, are not so much. Michigan, home of Motor City, ironically tops the list of the most expensive states for car insurance.

State laws dictate most expensive states for car insurance

Car insurance is a vital purchase. If one is to own a car, they better have insurance. Driving without it is a traffic violation that can result in a ticket if stopped by police and getting into an accident without it means one is totally on the hook for the damages, which can easily be more than one can afford out of pocket.

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However, the costs between the states, with some states being quite expensive and others being very reasonable. Every now and again, a new list of the most expensive states for car insurance will come out and the same two states are always in the top two, those being Michigan and Louisiana. For instance, two of those articles from CBS, posted in July and March 2012 have Michigan ranked first, Louisiana second in one but Louisiana first and Michigan third in another.

Lack of a damage cap a killer for the budget

In the first of those posts, Michigan ranks first as residents pay the highest share of their income, 8 percent, toward car insurance. Louisianans shell out 5 percent. The reason might be higher incomes overall along the Gulf Coast, as the typical premium in Louisianans was $2,536 per year, compared to $2,013 for Michigan.

The reason, according to Fox Business, for Michigan’s premium being higher is that the state has a “no fault” accident system, which means that every insurance policy has unlimited injury coverage for the injured party. Accident damage awards, according to CBS, are also high in Louisiana, contributing to the high cost of the premiums. Oklahoma is also a regular fixture on lists of the most expensive states for car insurance, as a number of cars are written off every year due to tornadoes.

Two Top Tens

Here are the top ten most expensive states for car insurance by percentage of income from a CarInsuranceQuotes.com survey, according to CBS:

Michigan – 8 percent
Louisiana – 5 percent
Kentucky – 4.5 percent
West Virginia – 4.3 percent
Mississippi – 4 percent
Arkansas – 3.7 percent
Delaware – 3.6 percent
New York – 3.5 percent
Nevada – 3.4 percent
Florida – 3.3 percent

The cheapest state was Maine, at 1.993 percent. However, according to a March 2012 survey by Insure.com, posted by CBS, the most expensive by annual premiums were:

Louisiana – $2,536
Oklahoma – $2,047
Michigan – $2,013
West Virginia – $2,002
Washington, D.C. – $1,866
Montana – $1,856
Rhode Island – $1,830
Wyoming – $1,732
California – $1,709
Georgia – $1,694

Only the top three were shared between the lists. Maine was, again, the cheapest, at $889.

Sources

CBS

Fox Business

CBS


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