Drivers in Michigan, Pennsylvania, the District of Columbia, Wisconsin and Kentucky can save the most, on average, by comparing car insurance rates, according to an analysis by CarInsurance.com.
CarInsurance.com analyzed rates for a 2016 Honda Accord with full coverage to identify the savings drivers can expect. Rates were fielded from up to six major insurers for nearly every ZIP code in each state. The average savings is the dollar difference between the highest and lowest rates received from insurers, on average, for each state’s ZIP codes.
The states where drivers can save the most, on average per year, by comparing car insurance quotes are:
- Michigan –$3,012
- Pennsylvania –$2,497
- D.C. –$2,180
- Wisconsin –$2,111
- Kentucky – $2,014
States where drivers save the least, on average, are:
- Alaska -- $353
- Virginia -- $450
- South Carolina -- $498
- Washington -- $504
- Minnesota -- $618
You’ll see the annual average car insurance rate, highest and lowest rates, on average, and the amount of savings for each state, on average, in the chart below.
|State||Average annual rate||Average highest rate||Average lowest rate||Average $ savings||Average % savings|
Methodology: CarInsurance.com commissioned Quadrant Information Services in 2017 to provide a report of average auto insurance rates for a 2016 Honda Accord for nearly every ZIP code in the United States. We calculated rates using data for up to six large carriers (Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm). The average state rate is comprised by averaging premiums for male and female drivers, age 40, male who commute 12 miles to work each day, with policy limits of 100/300/100 ($100,000 for injury liability for one person, $300,000 for all injuries and $100,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. The average savings is the dollar difference between the highest and lowest rates received from insurers surveyed, on average, for each state's ZIP codes. These hypothetical drivers have clean records and good credit. Average rates are for comparative purposes. Your own rate will depend on your personal factors and vehicle.
States that earned the highest savings also tend to have higher car insurance costs, overall, than those states with the lowest savings amount. The most and least expensive ZIP codes for car insurance show Detroit as the priciest. Michigan has the highest rates in the nation, primarily due to its unlimited benefits personal injury protection laws, while states in the bottom five enjoy relatively affordable rates compared to rest of the country.
Auto insurance competition is often a key to whether you can get great deals on car insurance. Wisconsin Commissioner of Insurance Ted Nickel says the National Association of Insurance Commissioners named Wisconsin the third largest insurance market in the U.S.
A "healthy, competitive market" leads to a "great deal of consumer choice," he says.
"Wisconsin's insurance market also benefits from consistent policies and regulation that aims to protect consumers and support industry growth."
Another state where consumers can find deals thanks to competition is Pennsylvania. Ronald G. Ruman, director of communications at the Pennsylvania Insurance Department, said the department works to maintain a competitive auto insurance market.
"We believe competition provides consumers with more choices and helps keep prices down. More than 200 companies write auto insurance in Pennsylvania, which benefits consumers," said Ruman.
Penny Gusner, consumer analyst for CarInsurance.com, echoes those statements. "In Alaska, the state with the least savings, there aren’t as many car insurance companies competing for business compared to many other states, so the range in rates among insurers isn’t as dramatic," says Gusner. “The Department of Insurance for Pennsylvania, for instance, lists hundreds and hundreds of car insurance companies doing business in the state, but Alaska’s shows just 20,” says Gusner. “Competition definitely contributes to a greater variance in rates among insurers.”
To see the average rate, and highest and lowest rates, for your neighborhood, enter your ZIP code in the tool below. For a more customized rate, select your age group, gender and preferred coverage level.
Why does where you live affect your car insurance rate?
Your insurance company's experience with losses in your neighborhood influences how much you pay. So does your state’s car insurance laws. Some states, for instance, allow insurers to consider your credit history when calculating your cost, while others don’t allow it.
In your particular ZIP code, factors that can drive rates higher include the number of:
- Claims for that area and how much they cost
- Vehicles stolen
- Claims for property stolen out of a car
- Fraudulent injury claims
- Reports of vandalism
Why do prices differ so much for the same driver and policy?
Rates from different insurers vary substantially, even within the same ZIP code. Each insurer bases rates on its own claim history and data set, among other factors, and uses its own formula when setting pricing. No two companies will have identical claims experiences in your area nor use the same calculations. That’s why prices among insurers can differ by hundreds or even thousands of dollars.
How to save on car insurance
It's great to save 364% on car insurance by shopping around like in Pennsylvania, but every little bit helps, right? Whether you save thousands or a few dollars, it's important to shop for car insurance at least every three years.
Nickel says prices for auto insurance can vary greatly and just a few hours of research can save you hundreds of dollars each year. However, don't just go with the least expensive policy.
"When choosing a company and policy, consumers should consider many factors, such as premium, benefits, service, renewability, financial strength and reliability of the company and company management philosophy," says Nickel.
Also, make sure to ask questions, so you get the right policy for your situation.
"While price is an important factor in shopping for auto insurance, consumers should also ask questions about how policies compare, and make sure they have the appropriate coverage to protect themselves and their families," said Ruman.
The Virginia Bureau of Insurance recommends that drivers also check their credit score. Credit score is one way that insurers in nearly every state devise rates. Insurance companies believe that a better credit score means a better driver who won't file many claims.
The Virginia department also suggests drivers increase their deductible. A higher deductible means you pay lower premiums. You'll want to make sure that you can afford the deductible in case you need to file a claim. Better yet: Set aside that deductible amount, so you'll always have it available in case you need it.
Nancy Atkins, Kentucky insurance commissioner, suggests drivers ask about discounts. There are more than two-dozen types of discounts, including bundling, good driver, anti-theft and low mileage discounts. You can actually save if you don't drive too much.
Regardless of where you live, you can save on car insurance by shopping around and comparing rates. You should compare car insurance rates upon renewal of your policy, but also if you move, buy a car, get married or divorced, have an accident or add or drop a driver from your policy.
Here are more tips for saving on car insurance:
- Check for discounts you may qualify for
- Maintain good credit
- Buy a car with a strong safety rating
- Raise your deductible if you have an older car or few assets
- Don’t buy comprehensive and collision if you have an older car