All drivers want affordable auto insurance, but the average
price drivers pay for insurance yearly varies greatly from
state to state because of factors such as the stability of
the economy and the state's population size. Check out the
following information to find out how much insured drivers
in your state are paying compared to other states.
According to Insurance Information Institute (www.iii.org),
the National Association of Insurance Commissioners (NAIC)
calculates average auto insurance expenditures per state by
assuming that all insured vehicles have liability
insurance, but not necessarily comprehensive or collision
coverage. The average auto insurance expenditure,
therefore, measures the price consumers actually pay for
insurance on each vehicle rather than equaling the sum of
liability, collision, and comprehensive coverage together.
This is because most policyholders do not usually carry all
three types of coverage. NAIC data also shows that 77
percent of insured drivers buy comprehensive coverage in
addition to liability insurance. And only 72 percent
purchase collision coverage.
In a September 2007 NAIC report, New Jersey held the record
for the highest average auto insurance expenditure per year
at $1,184. Following closely behind were the District of
Columbia at $1,182, New York at $1,122, Massachusetts at
$1,113 and Louisiana at $1,076. North Dakota is the least
expensive state for auto insurance at $554 per year, and
Iowa followed closely behind at only $555.
The price insured drivers pay is affected by the type of
coverage purchased, as well as other factors. People who
live in states where the economy is healthy are much more
likely to buy new cars than people who live in an unhealthy
economy. Since the coverage drivers select for new cars
differs and can be more costly than coverage for an older
car, these states often have relatively higher average auto
insurance expenditures per year. Urban population, traffic
density, and per capita income also significantly impact
the price of auto coverage. Highly urban states with high
traffic density and higher wages and prices will usually
possess the highest auto insurance expenditures per year.
In an NAIC chart comparing average annual auto insurance
expenditures by state
(http://www.iii.org/media/facts/statsbyissue/auto), Texas
drivers in 2005 paid an average of $845. So, the average
cost of Texas auto insurance ranked at number 17. Arizona
auto insurance cost about $926 per year in 2005, down from
$931 in 2004, keeping Arizona ranked number 14 both years
among the rest of the states. In California, insured
drivers paid an average of $847 in 2004 and $845 in 2005.
This ranks California auto insurance as the 18th most
expensive coverage in the United States in 2005. In
Florida, ranked sixth in 2004 and 2005, insured drivers
paid an average of $1,062 in 2004 and $1,063 in 2005. North
Carolina is one of the least expensive states for auto
insurance coverage, ranking at number 47 in 2004, with an
average cost of $597. However, in 2005, the average auto
insurance cost increased to $602.
Finding affordable auto insurance is so important to most
drivers, but depending where you live, prices will vary.
How do auto insurance rates in your state compare with the
rest?
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Ryan Patterson is president of US Insurance Online, based
in Austin, TX. He graduated in 2000 from the University of
Texas with a combined business and computer science degree,
and started US Insurance Online in May of 2005 with fellow
entrepreneur Jim Waltrip. Visit
http://www.USInsuranceOnline.com for help shopping for
insurance and for free insurance quotes.
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