Car Insurance Premiums Are Cheapest in These Five States

By

Giulia Carbonaro is a Newsweek reporter based in London, U.K. Her focus is on the U.S. economy, housing market, property insurance market, local and national politics. She has previously extensively covered U.S. and European politics. Giulia joined Newsweek in 2022 from CGTN Europe and had previously worked at the European Central Bank. She is a graduate in Broadcast Journalism from Nottingham Trent University and holds a Bachelor's degree in Politics and International Relations from Università degli Studi di Cagliari, Italy. She speaks English, Italian, and a little French and Spanish. You can get in touch with Giulia by emailing: g.carbonaro@newsweek.com.

Writers Page
US News Reporter
Trust Project Icon Newsweek Is A Trust Project Member

🎙️ Voice is AI-generated. Inconsistencies may occur.

While inflation has slowed down significantly over the last 12 months, having peaked at 9.1 percent in June 2022, car owners are still suffering the impact that higher prices had on their vehicles' insurance.

Car insurance rates have increased 17.1 percent over the past year, as reported by the U.S. Bureau of Labor Statistics consumer price index (CPI), driven by high inflation, supply shortages, technological advancement, and climate change.

With more extreme weather events like floods and fire expected to occur in the future, car insurance companies are expecting more claims, for which they would have to offer compensation. More refined, technologically advanced cars are also pushing up insurance premiums as they are more expensive to fix.

While incidents have not increased in frequency, they have increased in severity, driving up insurance premiums.

Cars USA
A motorcycle officer weaves through traffic on a Los Angeles freeway during the evening rush hour on April 12, 2023 in Los Angeles, California. FREDERIC J. BROWN/AFP via Getty Images

But while car insurance premiums have risen on a national average, the actual rates vary wildly across states.

These are the five states with the cheapest car insurance, as collated by FINN, a company that offers subscription-based car services including maintenance, insurance, and roadside assistance.

Ohio

Ohio has the lowest car insurance rates in the entire country, with an average annual premium of $1,023 for full coverage—$625 less than the national average.

Maine

The Pine Tree State has an average annual premium of $1,116 a year for full coverage. According to FINN, the state's low population density makes it less likely for car owners to have accidents.

Idaho

For the same reason—a sparse population and an abundance of rural roads—Idaho has the third lowest car insurance rate in the country, with an average annual premium of $1,121 for full coverage. Cities like Boise and Caldwell have higher rates.

Vermont

Vermont has an average annual premium of $1,158 a year for full coverage.

Oregon

Oregon has an average annual premium of $1,244 a year for full coverage.

The states with the highest car insurance rates, according to FINN's report, are Florida (with an average annual premium of $2,560), Louisiana ($2,546), Delaware ($2,137), Michigan ($2,133), and California ($2,115).

The Sunshine State is also the state that has seen the biggest increase in its average annual premium, which has surged by 88 percent between 2013 and 2023.

Higher premiums are bad news for car owners, who are facing higher fuel prices at the same time as higher car insurance rates. Gas prices now stand at an average of $3.757 per gallon nationwide. In states like Washington, California, Oregon, Nevada, and Alaska, gas costs over $4 a gallon on average as of July 31.

The price of new and second-hand cars has also surged in the past two years. According to a 2023 Edmunds used vehicle report published in May, the average cost of a used car was still 44 percent time higher in the first quarter of the year than it was five years ago. In June, used car prices dropped by 4.2 percent month-on-month, according to the latest Manheim Used Vehicle Value Index (MUVVI), as a result of easing inflation.

Request Reprint & Licensing Submit Correction View Editorial & AI Guidelines

Top stories

About the writer

Giulia Carbonaro is a Newsweek reporter based in London, U.K. Her focus is on the U.S. economy, housing market, property insurance market, local and national politics. She has previously extensively covered U.S. and European politics. Giulia joined Newsweek in 2022 from CGTN Europe and had previously worked at the European Central Bank. She is a graduate in Broadcast Journalism from Nottingham Trent University and holds a Bachelor's degree in Politics and International Relations from Università degli Studi di Cagliari, Italy. She speaks English, Italian, and a little French and Spanish. You can get in touch with Giulia by emailing: g.carbonaro@newsweek.com.

Writers Page

Giulia Carbonaro is a Newsweek reporter based in London, U.K. Her focus is on the U.S. economy, housing market, property ... Read more