Car Insurance Most Expensive in Michigan

Car Insurance Most Expensive in Michigan

Carinsurnacequotes.com has just released a list detailing who pays what for car insurance based on where you are from, and it turns out that drivers in Michigan pay the most while Massachusetts drivers fork over the least for car insurance.

The list details how much an average family pays out of its annual median household income for car insurance, and Michigan sits on top of the list, with drivers shelling out 8 percent of their income on average. Factors included in this price range from the likelihood of insurance fraud to the number of uninsured drivers on the roads and even the number of people living in densely populated areas.

Michigan is a slightly different situation than other states however, because it is a no-fault State, meaning that each driver must buy personal injury protection. This ensures that in an accident, no matter who is at fault, each driver has coverage for themselves. The original purpose of this policy was to reduce high-cost lawsuits, but has instead driven up pricing thanks to frequent claims for expensive medical procedures after an accident, often without merit.

On the other end of the spectrum is Massachusetts, where drivers pay just 1.43 percent of their median annual household income on car insurance. The main reason for this is because the average household income is higher than in most states, coming in at $75,000 to $80,000, where as Michigan’s average is $56,101. The average household income skews the findings in Massachusetts, but the second least expensive State, North Carolina, actually has a lower household income than Michigan, and they pay less for car insurance.

N.C. enjoys these low prices thanks to two main factors. First, the population in the State is very well spread out, even in urban centers. Second, the insurers do not set the rates. The North Carolina Rate Bureau, to which all of the licensed insurers belong too, sets a base rate. High risk drivers are sent to North Carolina’s subsidized high-risk pool, a point which is criticized by many. In North Carolina, “insurers can compete by discounting off the filed rate,” said Stuart Powell, vice president of insurance operations and technical affairs for Independent Insurance Agents of North Carolina. “But it’s very difficult for companies to charge higher rates than the filed rate, and most do not try.”

See the list below of the top 10 most and least expensive states to pay for car insurance.

Most Expensive

1. Michigan — 8.0 percent.

2. Louisiana — 5.0 percent.

3. Kentucky — 4.548 percent.

4. West Virginia — 4.239 percent.

5. Mississippi — 4.045 percent.

6. Arkansas — 3.660 percent.

7. Delaware — 3.573 percent.

8. New York — 3.542 percent.

9. Nevada — 3.439 percent.

10. Florida — 3.360 percent.

Least Expensive

51. Massachusetts — 1.434 percent.

50. North Carolina — 1.625 percent.

49. Hawaii — 1.634 percent.

48. Alaska — 1.751 percent.

47. Oregon — 1.955 percent.

46. Iowa — 1.973 percent.

45. New Hampshire — 1.988 percent.

44. California — 1.991 percent.

43. Virginia — 1.992 percent.

42. Maine — 1.993 percent.