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Average Cost for Auto Insurance in Each State: How Does Your State Compare?What states have the highest average insurance premiums? Which states have the lowest? According to the Insurance Information Institute (III), the average U.S. driver pays $850 for auto insurance (per car) per year. Many factors go into what will determine your specific auto insurance rate: level of coverage, deductibles, your location, your driving history, your car, your age, etc. But, as you can see below, the full ranking of the average auto insurance premiums paid in each state reveals significant variance at a state-by-state level. The most expensive state (district) for auto insurance is Washington DC with an average annual expenditure of $1,126. The cheapest state for auto insurance is North Dakota with an average annual expenditure of $503 - less than half that of Washington DC. Why such large differences? Average auto insurance costs are affected by the legal minimum coverages required of and purchased by drivers in a given state, as well as other factors. For example, in states where the economy is vibrant, drivers are more likely to purchase new autos than drivers in more economically depressed regions. Since new car owners are more likely to purchase collision and comprehensive coverages, these states will have a higher average expenditures by car. The National Association of Insurance Commissioners (NAIC) notes that urban population and traffic density also have a significant impact on premiums on a state-by-state level; many of the high cost states are highly urban (e.g., District of Columbia & New York), and have higher wages, price levels, and traffic density. Tort liability and other state-specific automotive laws and regulations, labor costs, coverage requirements, auto theft rates and other factors can also affect auto insurance prices. Average Auto Insurance Cost by State (Ranked from the Most to Least Expensive)
Source: National Association of Insurance Commissioners (2008 data)
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