April 17, 2014

USA Monthly Car Insurance Averages Revealed


Motorists in the United States know not to expect their insurance policies to cost the same as other drivers, even when they have the same type of policy from the same insurance provider. They are aware of the many factors that go into calculating a monthly premium, ranging from the age, gender and experience of the driver to the type of car to be insured.

Most drivers even understand that their car insurance rates also vary depending on where they live, but many are surprised to find out just how large the discrepancy is between states. CheapestCarInsuranceInCalifornia.com performed a study that revealed just what the monthly average cost for automobile insurance is in each state and the results were very telling.

Louisiana had the dubious honor of being named the state with the most expensive car insurance at $165 per month, followed by, in order: Michigan with $150, Georgia with $119, Oklahoma with $112 and Montana with $101 to round up the Top 5 and also the only states where the average climbed into the triple digits.

At the other end of the spectrum were the states with the cheapest monthly average, in descending order: Ohio with $33, New Hampshire with $32, North Carolina with $30, Iowa with $26 and the cheapest state to insure an automobile in, Maine, with only $19. The study performed by CheapestCarInsuranceInCalifornia.com can be viewed in its entirety here.

As it is plain to see, certain motorists can expect to pay a lot more on insurance simply because of where they drive. Why are some states are so much more expensive than others when it comes to car insurance? The answer usually has to do with the particular insurance laws that are applicable on a state by state basis. The second-most expensive state in that list, for example, Michigan, has guaranteed unlimited and lifetime PIP coverage for car accidents. Michigan is the only state to provide such a guarantee with insurance policies, where the insurance providers must pay the first $500,000 in medical bills and the rest is covered by the Michigan Catastrophic Claims Association. This also means that each insurance policy comes with an association assessment that is automatically included in the costs.

Louisiana has various reasons for ranking as the state with the most expensive car insurance. The biggest issue is the abnormally high number of claims made for bodily injuries resulted in car accidents. Often this is due to claims being filed that are fraudulent. Louisiana also has a law that sends all automotive accident-related lawsuits under the sum of $50,000 before an elected judge instead of a jury and the insurance companies claim that the judges have a tendency of siding with the consumers regardless of who is at fault.

Another reason why certain states have costly insurance policies is their high level of urbanization. Big cities are almost always flowing with heavy traffic and the chances for an accident climb substantially. The number of cars in such states is also greater and it stands to reason that more claims will be filed in these states. These are two reasons that keeps California among some of the most expensive states to purchase car insurance.

Alternatively, states with cheap insurance still have large rural landscapes with underdeveloped road systems where heavy traffic is not an issue. Other states, such as Maine, also have more advanced licensing requirements in place that apply certain restrictions on young, inexperienced drivers. These type of drivers are one of the main causes of road accidents, making Maine’s strict licensing policies one of the main reasons they can offer the cheapest automobile insurance in the United States.

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