Louisiana, Michigan Found Most Expensive For Auto Insurance

April 12, 2010
Flooded Cars 01

Flooded Cars 01

Louisiana has the highest average auto-insurance rates in the U.S.

With an average annual premium of about $2,511, the bayou state beats second-place Michigan by more than $400 annually, according to a new Insure.com study.

Blame Hurricane Katrina, at least in part. According to insurance experts, the answer resides in the state's sketchy court system as well as the estimated 125,000 vehicles that were scrapped after the 2005 storm. A poor road system in Louisiana also contributes to higher-than-average bodily injury and lawsuit rates.

Second-place Michigan has high insurance rates for a completely different reason. The state is the only one to have such an extensive personal injury protection (PIP) system, extending unlimited medical benefits to all accident victims for life, and requiring the insurer to cover the first $460,000; a statewide pool kicks in after that. Also, Michigan's high rate of unemployment translates to a high rate of uninsured drivers—a burden that inflates the amount for responsible drivers who do manage to pay their premiums.

Oklahoma and Montana were two other states with surprisingly high insurance costs, ranking third and fourth, respectively, with California having the fifth most expensive policies.

New York and New Jersey drivers—particularly those in the New York City area—are so often griping about the high costs of insurance in their respective states. But surprisingly, those states aren't even in the top ten.

Maine is the state with the least expensive premiums, which Insure.com attributes to a good network of highways that aren't that busy, relatively low commute distances, and plenty of competition among insurers. Maine residents are also less likely to sue than those in other states.

Insure.com commissioned Quadrant Information Services for the study, which included calculations for more than 2,400 model-year 2010 vehicles—all based on a 40-year-old single male driver with a 12-mile daily commute. Averages were based on ten different zip codes. The sample policy included $100,000 limits for injury liability, $300,000 for all injuries, and $50,000 for property damage, plus a $500 deductible for collision and comprehensive claims.

Here's a summary of states with the most and least expensive insurance premiums, but go to Insure.com for the full list.

Money, money, money

Money, money, money

Five States With The Most Expensive Insurance Premiums:
1. Louisiana - $2,510.87
2. Michigan - $2,098.29
3. Oklahoma - $1,869.39
4. Montana - $1,857.96
5. California - $1,774.41

Five States With The Least Expensive Insurance Premiums:  
1. Maine - $902.85
2. Vermont - $968.58
3. Ohio - $999.86
4, Wisconsin - $1,010.93
5. New Hampshire - $1,011.23


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