Most and least expensive ZIP codes for car insurance by state

The highest car insurance rates in the nation belong to Detroit, according to CarInsurance.com's analysis of rates for a 2016 Honda Accord with full coverage for nearly every ZIP code in the country.

ZIP codes in Brooklyn, New York and New Orleans, Louisiana rank second and third, respectively, behind Detroit, Michigan.

Drivers can enter a ZIP code in CarInsurance.com’s average car insurance rates tool to see the average premium for the location, as well as the highest and lowest rates. You can get a customized rate by choosing from among six age groups for men and women and three coverage levels.

Rankings were determined by identifying the highest ZIP code for car insurance in each state and then listing them in descending order.

The top 10 most expensive ZIP codes by state for full coverage car insurance are:

1. Detroit, Michigan, in ZIP code 48227: $7,415

2. Brooklyn, New York, in ZIP code 11212: $4,440

3. New Orleans, Louisiana, in ZIP code 70117: $3,747

4. Coral Gables, Florida, in ZIP code 33135: $3,310

5. Philadelphia, Pennsylvania, in ZIP code 19132: $3,189

6. Las Vegas, Nevada, in ZIP code 89101: $2,705

7. Providence, Rhode Island, in ZIP code 02909: $2,573

8. Los Angeles, California, in ZIP code 90010: $2,552

9. Baltimore, Maryland, in ZIP code 21216: $2,423

10. Essie, Kentucky, in ZIP: code 40827: $2,405

Most expensive ZIP codes for car insurance by state

To find the most expensive ZIP code for car insurance in every state, see the table below.

Motor city madness: Why are car insurance rates so high in Detroit?

Detroit is notorious for having the most expensive car insurance rates in the nation, due to a variety of factors, though recently passed auto reform laws could provide relief to Michigan drivers starting next year. For now, though, here are some of the reasons Detroit has the most expensive rates in the nation:

• Unlimited no-fault laws -- The state’s unique no-fault insurance laws that were in place for decades mandated lifetime medical care for those injured in car accidents, beyond what their health insurance pays. It also provided up to about $5,400 per month in lost wages for up to three years, regardless of who caused the accident. While recent auto legislation reform is underway that will eliminate mandated life-time medical payouts, it's too soon to tell how much this will lower rates for Michigan drivers.
• Exorbitant Personal Injury Protection (PIP) claim costs – PIP is medical coverage for those injured in car accidents. The average payment per paid PIP claim increased 72 percent in Michigan, from $25,997 to $44,756, from 2005 to 2013, according to the Insurance Research Council. More recent research shows that from the state Department of Insurance and Financial Services says PIP on average accounted for 49% of total premiums in 2015.That’s significantly higher the 38 percent jump in the average cost per claim, from $5,802 to $8,017, for PIP claims nationwide. However, under the new laws, starting in July 2020, you will be able to forego personal protection benefits entirely if you have health insurance such as an employer plan or Medicare. Other options will include sticking with unlimited coverage or choosing either $250,000 or $500,000 worth. So, lower rates should be realized at some point for Detroit (and Michigan) drivers.
• Fraud: Critics of the no-fault laws in Michigan say that the system is vulnerable to fraud, as aggressive lawyers contribute to escalating numbers of lawsuits and seek to cash in by shuttling clients into unnecessary and costly medical treatments. This is compounded by hospitals charging higher fees for patients injured in car accidents, compared to standard patient costs. The state also lacks an insurance fraud oversight board or committee.
• Uninsured motorists: Michigan has one of the highest uninsured driver rates, (ranked No. 4 for states with the highest uninsured driver rate) with an estimated 20% of motorists going without insurance, according to the latest Insurance Research Council study. But estimates for the uninsured rate in Detroit are even higher.  In a commentary for the Coalition Protecting Auto No-Fault, Melvin Butch Hollowell, former Michigan insurance consumer advocate, put the number at 60 percent.
• Economic struggles: In Michigan, car insurance companies review credit histories when setting rates, and those with poor credit pay are seen as high-risk by insurers, so they are charged more money. Michigan tops the list of the worst states for drivers with bad credit, paying an average of 167% more than those with good credit. The average FICO score for Detroit is 608 — among the lowest for large cities, according to Experian.
• High theft rates: Metro Detroit ranked eighth for the most vehicle thefts in the nation, with a total of 11,746 thefts in 2017, according to a recent report by local news WXYZ citing the Auto Theft Prevention Authority report. Statewide in Michigan, there were 14,242 auto thefts. That’s 39 auto thefts every day, most in metro Detroit.

What ZIP codes are the lowest for car insurance rates?

The least expensive locations for full coverage car insurance rates are:

1. Fremont, Ohio,  ZIP code 43420 and Coldwater, Ohio ZIP code 45828 (tie): $804

2. Swannanoa, North Carolina, in ZIP code 28778: $813

3. Normal, Illinois, in ZIP code 61761: $818

4. Blacksburg, Virginia, in ZIP code 24060: $819

5. Lafayette, Indiana, in ZIP code 47901: $838

6. Boise City, Idaho, in ZIP code 83706: $855

7. Biddeford, Maine, in ZIP code 04005: $861

8. Nantucket, Massachusetts,  ZIP code 02554 and Siasconset, Massachusetts ZIP code 02564 (tie): $877

9. Ames, Iowa, in ZIP code 50012: $907

10. Watertown, South Dakota, in ZIP code 57201: $913

CarInsurance.com's analysis showed a national average rate of $1,355 for full coverage, and several locations, including San Jose, California, and Scottsdale, Arizona, mirror that average.

Least expensive ZIP codes for car insurance by state

To find the least expensive ZIP code for car insurance in every state, see the table below.

Rural areas generally cheaper than urban areas for car insurance

The cheapest ZIP code for car insurance, Fremont, Ohio, is about 40 miles from Toledo and has a population of about 17,000. Freemont is typical of locations that tend to have low car insurance rates. Drivers in rural areas generally pay less than drivers in urban areas. Rural areas have fewer cars on the road, so costs for insurers are lower because there are fewer accidents, claims and thefts.

Each state’s car insurance laws also come into play, as some state minimum liability requirements are much lower than others.  “Ohio has minimum limits of 25/50/25 for liability, with no requirement for PIP, which helps keep down rates,” says Penny Gusner, consumer analyst for CarInsurance.com. “Ohio also has a healthy car insurance market.  With plenty of regional and national auto insurers, motorists have companies competing for their business and can readily obtain low car insurance premiums by shopping around and comparing rates.” 

Why car insurance rates vary so much among insurance companies

Car insurance companies assess many factors when setting rates, and your location is chief among them. Based on the number and severity, or cost, of car insurance claims within the area, insurers assign ZIP codes different risk levels. Insurers take into account the frequency of thefts, collisions and vandalism to gauge the likelihood of such incidents happening to drivers within the ZIP code. This is used as the base rate from which insurers calculate your premium. Other pricing factors, such as your driving record, type of car you drive and your age are then added into the calculation. 

To estimate car insurance costs, you can take into account your age, the level of coverage you need and your location.

Every car insurance company uses its own base rate and formula, which is why rates can vary so much, and why it's important to comparison shop to get the best cheap car insurance. For instance, CarInsurance.com’s rate analysis found the following potential savings, or the difference between the highest and lowest price, for the same policy:

• State minimum liability – average savings of 153 percent, or $497
• Full coverage – average savings of 138 percent, or $1,127

Methodology:

CarInsurance.com commissioned Quadrant Information Services 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). 

Averages for the default result on the average rates tool are based on full coverage insurance for a married 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/100 ($100,000 for injury liability per person, $300,000 per accident and $100,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. The rate includes uninsured motorist coverage. Rankings are based on this default driver profile. ZIP codes in ranking were the highest ZIP code for car insurance in the state, ranked by descending order. Rankings for the cheapest ZIP code were in ascending order from lowest premium.

Averages for customized rates in the tool are based on drivers ages 20, 30, 40, 50, 60 and 70 for the following coverage levels: state minimum liability, liability of 50/100/50 and 100/300/100 with $500 deductible on comprehensive and collision. 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.