Do you think your car insurance rates are expensive? They may not be as high as you think when compared to those of other states.
Insurance premiums are affected by various factors including age, the type of car and your driving record. According to a study by Insure.com, your insurance premiums can also be affected by your zip code.
The 2016 state-by-state comparison study of car insurance premiums involved the study of insurance premiums offered by six of the largest car insurance providers in the country. The data used in the study was compiled in February of 2016.
The rates used in the study were based on full coverage that would be offered to the average single 40-year-old male. It was assumed that the driver would travel about 12 miles to work each day.
According to the study, the national average for auto insurance premiums for 2016 is $1,325. This figure is an increase from last year’s average rate of $1,311. The difference between the most affordable and most expensive states ranges from $800 to $2,700.
Why Insurance premiums vary
Insurance rates are influenced by various factors, which vary from one state to another. These factors include:
• Traffic density
• The percentage of drivers that are uninsured
• State and local laws
• The competition in the market amongst insurance providers
Most expensive states
Michigan topped the list of most expensive states for car insurance rates in 2016 with an average rate of $2,738. The high insurance rate is a result of the “no-fault” state law. This is also the only state that requires car owners to have unlimited lifetime medical benefits included in their auto insurance policy. Car owners therefore have to pay more for auto insurance to ensure that they fulfill this unique law.
The second most expensive state for car insurance was Montana with an average rate of $2,297. The state maintained the second position for the second year in a row. If you’re a car owner in Montana, there’s a good chance that you’re paying over 73 percent above the national average for car insurance.
There are several reasons that the insurance rates in Montana are so high. It is because the country has the highest rate of traffic accidents in the country. The lonely roads and wide open spaces of the state are a cause of many accidents and fatalities.
3. New Jersey
New Jersey is the third most expensive state for auto insurance with an average rate of $1,905, or 44 percent above the national average for car insurance. One reason for this high insurance rate may be that the state has the highest population density in the country. There are therefore higher chances of an accident occurring.
Other factors that drive the rate of auto insurance up in New Jersey include the high medical fees and the high rate in fraudulent medical claims.
This was the 4th most expensive state with an average premium of $1,842. One may assume that insurance premiums down by the Bayou would be low but the state-by-state comparison proves different. The high rates can be blamed on the judicial system in the state, which has driven insurance costs up.
The average rate for auto insurance in Oklahoma was $1,778. This made Oklahoma rank as the fifth most expensive state for car insurance in 2016. The state consistently rates high on the list of most expensive states for car insurance mostly as a result of the high number of uninsured drivers in the state. Findings from a 2014 study by the Insurance Research Council, showed that Oklahoma led in the number of uninsured drivers at 25 percent.
Always be sure that you compare auto insurance rates before purchasing one. It’s hard to get the best deal possible on your premiums if you don’t shop around.