Car insurance costs rose a painful 22.2% from March 2023 to March 2024, according to the Bureau of Labor Statistics. But drivers aren’t all suffering equally. Those with poor driving records already pay more and have undoubtedly seen larger increases.
Location plays a part, too. Drivers in some states have higher rates than others due to population density, auto insurance laws, and likelihood of natural disasters. Residents of the following 10 states luck out with some of the lowest average premiums in the nation.
The 10 states with the cheapest car insurance rates in the U.S.
The following 10 states have the lowest average annual car insurance premiums:
| Rank | State | Average Monthly Premium | Average Annual Premium |
|---|---|---|---|
| 1 | Hawaii | $135 | $1,619 |
| 2 | Washington | $150 | $1,803 |
| 3 | Alaska | $158 | $1,897 |
| 4 | Idaho | $168 | $2,010 |
| 5 | Indiana | $172 | $2,065 |
| 6 | Maine | $183 | $2,201 |
| 7 | Ohio | $187 | $2,238 |
| 8 | Iowa | $191 | $2,286 |
| 9 | Massachusetts | $193 | $2,315 |
| 10 | Wisconsin | $196 | $2,346 |
Source: Quadrant data. All amounts are rounded to the nearest dollar.
There’s no clear geographic similarities between the states that make the list. But there are other factors that could explain why drivers in these states pay less, including:
- Low population density: States like Alaska, Idaho, and Maine have relatively low population densities. This means they have fewer drivers on the roads, which reduces the risk of collisions. Fewer urban areas also reduces the risk of theft and vandalism.
- Few uninsured drivers: High rates of uninsured drivers increases the risk that insurers will have to pay for damages their drivers didn’t cause. But states like Idaho, Iowa, Maine, and Massachusetts have comparatively low rates of uninsured drivers.
- Low incidences of natural disasters: While all states experience some severe weather from time to time, areas like Tornado Alley or the Gulf Coast tend to see far more than a place like Maine or Alaska.
But it’s worth remembering that these factors only play a small part in overall rates. A driver’s record behind the wheel and their vehicle make and model matter far more when setting premiums.
Three tips to help drivers save on their car insurance in 2024
Those who don’t live in one of the 10 states above could see higher average annual premiums through no fault of their own. But by making the following three moves, it’s possible to secure a lower average rate.
1. Shop around
Every auto insurance company has its own formula for determining risk. Some have higher surcharges for young drivers, while others might penalize a driver more heavily for having poor credit or a DUI on their record.
The only way to know which companies offer the cheapest car insurance for a specific driver is to get quotes. Most companies have online tools that can provide an accurate price estimate within a few minutes. It’s worth getting at least three to five before deciding which company to work with.
2. Seek out discounts
Drivers usually don’t have to request that insurers apply discounts to their car insurance premiums. This typically happens automatically during the quote process. The only exception is for driver monitoring programs, which applicants have to opt into. This usually provides an upfront discount with the potential to earn future savings based on driving behavior.
Insurers commonly offer discounts for things like safe driving or bundling auto and home insurance. But some companies offer rarer discounts, such as savings for hybrid or EV owners. Those who qualify could do better by seeking out companies with these special savings opportunities.
3. Raise the deductible
Raising a car insurance policy’s deductible reduces its monthly premiums, sometimes significantly. The Insurance Information Institute found that raising the policy’s collision and comprehensive deductible from $200 to $500 dropped premium rates by 15% to 30%. Going to a $1,000 deductible resulted in savings of 40% or more.
Drivers interested in exploring this option may want to save for their new, higher deductible in an emergency fund if possible before making the change. Otherwise, they risk being caught without enough money to cover their out-of-pocket costs in the event of an accident.
Ideally, the above tips lead to an affordable rate, but if not, check again in a few months or after experiencing a major life event. Factors like getting married, buying a safer vehicle, or even just getting more experience behind the wheel can all translate to lower car insurance premiums.
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