The Highest and Lowest Car Insurance Rates in America

The Highest and Lowest Car Insurance Rates in America

Car insurance, or liability insurance to be more specific, is required in every city in America. It’s a firm and inflexible rule that everyone on the road must have some form of coverage, and for good reason. Part of being a responsible driver is keeping an eye out for your fellow drivers, and when things are their worst on the road, it’s a comfort to know that layer of protection is there — but in some places, you’d be surprised how much this mandatory coverage can cost.

A study recently released by InsuranceQuotes.com tells an interesting story about how affordable car insurance is across America, ranging from the most outrageously high premiums to the most incredibly cheap car insurance rates available. At first glance, it may appear that location alone is affecting rates across the United States, but many other factors contribute to different rates.

This study examined car insurance rates across America, compared them, and ranked them by how much they deviate from the national average. Detroit, for instance, tops off the list as home of the most expensive average rates in America; a staggering 165% higher than the average American car insurance policy.

As ironic as it is that Motor City has the highest rates in America, Laura Adams, senior insurance analysis for InsuranceQuotes.com says that, “There are quite a few reasons for that,” and that Detroit isn’t an island of price-gouging in a sea of otherwise standard prices. “Michigan’s rates are typically higher than average across the state.”

Adams continues to explain the higher statewide rates by bringing up the way Michigan handles fault coverage. These policies usually cover the policy holder, regardless of who’s as fault, but since those policies aren’t required in Michigan, rates are inherently higher.

“Those policies are typically higher than average,” Adams said. “Michigan also has unlimited coverage for medical, which means if someone breaks their arm and they require therapy for the rest of their life, the insurance company is responsible.” Detroit is also home to plenty of uninsured drivers, as many as 50% of motorists, and a high crime rate, both factors that contribute to high insurance rates.

Conversely, North Carolina is home to the lowest average car insurance rates in America according to this study. The Charlotte-Concord metropolitan area has average rates that rank a full 43% lower than the national average, and just like Detroit, it has more to do with the state itself than the geographic location.

“North Carolina is a very highly regulated state,” said Adams. “There are a lot of laws that make it hard for them to raise rates, so they stay suppressed.” In addition, North Carolina’s population density is very sparse, and less traffic on the road means fewer accidents and lower rates.

Eli Lehrer, president of The R Street Institute, remarks that, “There is definitely correlation between population density — and thus traffic density — and insurance rates. When you have more cars on the road, you have a greater likelihood of accidents and insurance claims. That’s why you see really crowded cities like Los Angeles and New York near the top of the list, while cities like Charlotte and Cleveland are near the bottom.”

Want to see how your local rates rank? Follow this link to access the full study in an interactive map of America. Feel free to leave us a comments and share your experiences with the site!