Here’s another interesting 50-state infographic compiled by HowMuch.net about The Real Difference Between Minimum and Full Coverage Car Insurance. It shows the average annual cost of auto insurance for both the minimum level required by law (usually only liability to pay for damage you caused) and full coverage (adds collision and comprehensive to pay for damages to your own vehicle).
I was surprised at how much auto insurance costs vary by state. Minimum coverage easily varies from $500 to $1,000 a year. But what’s up with Michigan? How can every driver afford $2,700 a year for insurance?
I’m rather spoiled as my annual premium for full coverage is $600 a year ($50 a month) for each car, and that includes the higher liability limits required to qualify for umbrella insurance. Of course, I’m now old and boring. But even when I was in my 20s, I don’t remember it costing more than $100 a month.
Many state insurance departments maintain a database of insurance premiums that can help you find the insurer with the lowest prices in your area. See: Big List of Auto Insurance Premium Comparisons for All 50 States.
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I’d be curious to know for what car and value this infographic was quoted for.
That said, I’m right in my state’s bar as I drive two paid for cars for a total of ~$1200 a year for insurance.
I don’t think data for Michigan is correct. I live in Michigan and neither myself nor anyone I know pays this much for auto insurance.
Agree. I’m in Michigan and while our rates are well known to be among the highest, they aren’t this high. Our bill for 3 people including a young male driver is around $3000/yr. Don’t know what it would be without our discounts but it’s nowhere near what is shown on the graphic.
Nick, do you live in Detroit? Detroit has the highest rates in the nation and drive up the average for MI.
I agree with Nick…the Michigan data appears incorrect. I live in Michigan and everyone I know pays <$700 per year
I live in CT and am paying only $589 for car insurance after dropping collision, but with enough coverage to enable me to get an umbrella policy as well.
I no longer live in Michigan, but frequently travel to Metro Detroit. While out networking with some Detroit locals, they shared horror stories that would corroborate this data. Stories where their aging parents could no longer afford to own a car because the insurance itself was the size of an extra car payment. Their input on the situation was that there’s a significant percentage of drivers in Detroit and surrounding areas that drive without car insurance. So insurance companies jack up the rates on paying customers to make up for the risk and loss from those drivers not paying. I think the average is heavily swayed by rates paid by people within Detroit city limits and maybe a handful of other cities. Other reports by the Detroit Free Press also point to Michigan’s no-fault insurance policy.
We pay $1215 a year in Florida for full coverage on a 2018 Subaru Forester. Perhaps due to age, no traffic tickets, and 1 fender bender in the last 20 years, we get lower rates than average.
I think this must be per household costs rather than per vehicle but yes, it is very expensive in Michigan. The biggest reason why is that MI is the only state that requires unlimited Personal Injury Protection (PIP) coverage. If you get injured in an auto accident and have subsequent medical bills, auto insurance is required to cover all of them for life. No other state comes close to this level of mandatory coverage.
http://www.michiganradio.org/post/why-are-michigan-s-auto-insurance-rates-so-high
Jared is correct that the Detroit numbers are skewed at the high end. 2 years ago I moved from suburban Detroit to suburban Grand Rapids and my car insurance costs went down about 20% just due to the change in ZIP Code.
I think no-fault insurance is the reason Michigan is so high. I moved to Florida a couple of years back from Ohio and was surprised that our auto insurance doubled because of the no-fault PIP insurance requirement. And the chart reflects that it is about double from OH to FL. It really sucks when someone wants to be responsible and carry more than the minimum required for the state that you have to pay so much for something that will likely not get used. I guess they discuss eliminating the PIP requirement in the legislature but the Doctor/Chiropractor/Lawyer lobbyist are powerful enough to not let the measure pass. The other thing I’ve seen is a large premium increase (nearly 20%) from year to year in Florida with no claims or moving violations on our records. I hate shopping for auto insurance every year. In Ohio, I had the same Auto Insurance company for about 12 years even after getting quotes from others every few years. I thought Homeowners Insurance would be through the roof in Florida compared to the midwest, but the rates are actually on par with what we were paying in Ohio
I was also curious about Michigan, so I went looking and found this: “Michigan has an unlimited medical benefit for injured drivers under the no-fault auto insurance law.”
Source: http://www.michiganradio.org/post/why-are-michigan-s-auto-insurance-rates-so-high
We definitely pay more in Michigan thanks to being the only state in the country with a no-fault policy requirement. Fun.
I lived in Detroit from 2012-2014. I lived in midtown, near Wayne State, in a quickly gentrifying area. The quotes I got for car insurance would have been $5000+ per year, more than my 2003 car was worth. I was only there for a temporary school program, so I was able to keep my home state insurance, but getting coverage in Detroit is nuts. I knew many people who used friends’ addresses in the suburbs to get better rates.
Here is the original source from Nerdwallet :
https://www.nerdwallet.com/blog/insurance/car-insurance-basics/cheap-full-coverage-insurance/
The methodology is buried in the bottom and you have to click a down arrow to see it.
They averaged rate quotes from the largest insurers for 30 year old men and women in 10 zip codes and used a 2014 Toyota Camry.
Since they’re averaging rate quotes rather than what people actually pay then I think this will skew high.
If you’re shopping for insurance and get 3 quotes of $1000, 1100 and $2000 then which one do you choose? You’re likely to pick the $1000 rate right? But their methodology averages those and that comes out to $1366. So that skews higher than rates people will probably actually pay. It is also likely to seem high to the average reader of a finance blog since I think most of us are the types to shop around for good rates.
Also the 2014 Camry seems common and typical but its only ~3 years old (at the time of the report) and the average car on the road in the US is around 10 years old. Theres a big difference in comprhensive cost to insure a 3 year old car still worth probably $10-20k versus a 10 year old car worth $2-5k.
https://www.nola.com/business/index.ssf/2018/02/car_insurance_louisiana_high_w.html