What State Has the Highest Rate on Auto Insurance?

By J. Nicholson

Car insurance rates are based on many factors within your control such as your credit rating, driving record, the type of car you drive, and your history of insurance claims. However, there is another big factor over which you have little control: the state where you happen to live.

It is an unfortunate fact that some states simply have higher rates on auto insurance than others. While you might have a sterling driving record and an impeccable credit score, if you live in the wrong state you will still have to pay high car insurance rates.

Do what state has the highest rate on auto insurance? The answer is not even a state, but the District of Columbia. The home to the federal government tops the list of most expensive car insurance states with average annual combined premiums of $1342.80, as of 2005, the most recent year for which data is available from the National Association of Insurance Commissioners.

Many of the other states with the highest rate on auto insurance are located in the Northeast, including New York, New Jersey, Rhode Island, Massachusetts, and Delaware. Again, this is as of 2005 so things may have changed a bit since then. Louisiana, Alaska, Florida and Nevada round out the list of the ten states with the highest rate on auto insurance.

To understand why the Northeast is the most expensive region for car insurance you just have to take a drive on the traffic-choked streets of New York City or brave the crazy drivers on the New Jersey Turnpike.

Insurance rates are based on the number of claims files and how expensive those claims are. There tends to be many more claims filed in congested, urban areas like the Northeast, so the rates that all drivers pay in that area go up.

In contrast, Iowa has the lowest average combined car insurance rates in the country, clocking in at just $664.20 - less than half of the District of Columbia's rate.

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