Florida, Texas or California - where is Car Insurance Cheapest?

Moving across state borders brings a world of change...but did you know it could dramatically alter your car insurance rates too?  It's twice as expensive to insure your car in Louisiana than in Maine, for example.  What gives?
Insurance rates vary state by state, for lots of different reasons.  From a governor's attitude toward safety laws to the makeup of the population, there's a myriad of conditions factoring into the algorithm used by insurers to figure your premium.

What makes auto insurance vary from state to state?

According to a study performed by Quadrant Information Services just over a year ago, the national average car insurance rate is $1,311 for a 40 year old male who has good credit and a clean driving history.

But some states swing wildly from that average.  If our 40 year-old prototype were to move to Michigan, for example, he'd see an eye-popping 89% increase from that average!  The price for insurance in that state isn't quite double the national average, but it comes pretty close: $2,476.

But should our nomadic 40 year-old man move east and head up to Maine, he'd be in for some nice discounts on his car insurance.  There, his bill would be 39% lower than the national average, at just $805.

As for Florida, Texas or California, well their auto insurance rates for our 40 year-old are all above the national average:

  • Florida: $1654
  • Texas: $1510
  • California: $1752

Why the differences?

Insurance companies favor safety, so if a state's laws don't support safe driving then rates will go up for residents of that state.  Consider the states whose anti-texting laws are lagging behind and you'll see an example of this in action.

Likewise, when roads are in bad shape, that makes for more accidents and more wear and tear on a car.  Rates go up.  There may not be a direct link between state laws and road conditions, but when they translate into higher mortality or injury rates, that has a numerical impact on the formula used to figure a premium.

Population density has an effect, too.  Cities are crowded so there are more fender benders, hence higher rates.  But statewide, rural areas will balance out the dismal urban stats on accidents, evening out the rates people pay.  That doesn't help Washington, D.C. though, which is entirely urban and hence has high car insurance rates.

And that's just the beginning.  Rates can vary according to frequency of disastrous weather, number of uninsured drivers, crime, and insurer competition.

You can see how every state measures up here on our handy car insurance comparison tool.  Compare rates across all the major insurers, and see how they vary state to state as well as by any other factors you choose to enter.