If you have moved to a different part of town or even moved to another state, you’ve probably noticed that your car insurance premiums changed. Although many drivers feel their personal driving habits and record should be the biggest defining factor for establishing your premiums. You are only half-right.
Your driving record and other personal factors such as credit rating and how many miles you drive to work each day do influence your premium, insurance companies cite other contributing factors to create your base premium. One of the biggest insurance premium altering factors is where you live.
How much money an insurance company has paid in the state you live grossly affects your premium. For instance, Louisiana residents can expect to pay almost 60% more on insurance every year than a similar driver in Maine. Hurricane Katrina may be one of the biggest reasons why, but a healthy car theft rate also contributes to the bloated premiums in Louisiana.
According to a 2012 study by Quadrant Information Services, the five states with highest insurance premiums are:
1) Louisiana: $2,536
2) Oklahoma: $2,047
3) Michigan: $2,013
4) West Virginia: $2,002
5) Washington, D.C.: $1,866
Obviously if you live in one of those states, you probably already know you pay too much for car insurance. However, if you live the following five states you might not give it a second thought:
1) Maine: $889
2) Iowa: $985
3) Wisconsin: $987
4) Idaho: $1,011
5) North Carolina: $1,022
If you can stand the winters in Maine, it might be worth your while to move there to save on insurance. Though many of us aren’t willing to uproot ourselves just to save a few bucks each year, it might help assuage your frustrations and anger to understand more about why the variance between rates from one state to the next are so large.
Weather, population, and number of accidents each year are contributing factors, but the bottom line really has to do with the risk involved for the insurance company. The higher the “risk” of driving in your area, the more the premiums will be. Additional, the economy of a state will influence how much you pay annually for insurance.
For example, Michigan is the third most expensive state, but it has little to do with natural disasters like those that Louisiana suffered. According to the study, living in an area where too many people can’t afford insurance will make your rates go up. Uninsured motorists have a drastic effect on what you pay. It may not be fair, but the risks of insuring you are higher, hence the higher premiums.
If you want to know more about why your rates are what they are, contact your insurance agent or go to our home page to see if you can find a better rate. To see the full list of states, follow this link.
Good luck and safe driving!