Why Do Car Insurance Rates Vary From State To State?

April 14, 2011

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People may find themselves asking this question if they have just moved from one state to another or if they know someone in another state whose insurance premium is significantly higher or lower than theirs.

For instance, if they live in New York they might find that their friend in Pennsylvania is given a cheaper car insurance quote than the one they are given. Or they may notice that ever since they moved from Georgia to Florida, their rates have sky rocketed, however, they are not alone.

Carinsurancestation.com provides consumers with many pages of knowledgeable information pertaining to car insurance. According to the National Association of Insurance Commissioners the most expensive auto insurance rates were found in D.C., Louisiana, New Jersey, Florida and New York. The least expensive were in Kansas, Wisconsin, North Carolina, Maine and Indiana.

There are many factors that are responsible for the difference in the cost of auto insurance premiums among states. One factor to blame is the population. If the area in which a person lives is densely populated there will be more cars on the road and this will increase the likelihood that an accident will occur. If there are more accidents, there will be more claims filed. To an insurance company, claims equal money. The more claims that are filed, the more money they will have to pay out. If they have to spend more, consumers will too.

Another factor that influences car insurance quotes is the crime rate in any given area. It is possible that consumers may have an elevated crime rate if they live in a densely populated area. It’s unfortunate that crime rates are affected by the size of the population, however, it’s also inevitable because the more populated an area is, the more likely that crime will occur. In this case, crimes for concern are those such as auto theft and vandalism. Consumers might be thinking their high priced auto insurance rate is the real crime here, but let’s not run anyone over.

The price tag on litigation services in any state can be yet another determinate in an overpriced insurance quote. If a consumers state has a complicated legal system or the cost of litigation is higher in that state than another, the insurance rates will reflect it. This can sound unfair and consumers will probably be disappointed by it, but if they ever need to sue anyone or if they’ll ever be sued, their insurance company wants to make sure they’re not the ones paying for it – consumers can bank on it.

Tornadoes, hurricanes and earthquakes. While these natural disasters are destructive enough, they can also destroy consumers’ premiums. Extreme weather conditions cause more accidents and as we all know, more accidents, equals more claims, equals more money.

Other factors that can have an effect on car insurance is the cost of living as well as the minimum amount of liability coverage required to have for personal injury and property damage in a premium. The greater these values are, the more expensive rates will be.

Don’t give up driving just yet. Consumers still have many insurance coverage options. While people might already be living in or moving to a state with expensive auto insurance rates (and although they may not be willing to relocate for a cheaper premium) it might be comforting to know that there are places that can help them compare auto insurance quotes in their area and find the cheapest rate for them. Whether they need rates for California auto insurance, Nevada auto insurance or Texas auto insurance.

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