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10 Cheapest States for Car Insurance

Published
February 28, 2018
Christine DiGangi

Christine DiGangi is the former Deputy Managing Editor - Engagement for Credit.com and covered a variety of personal finance topics. Her writing has been featured on USA Today, MSN, Yahoo! Finance and The New York Times International Weekly, among other outlets.

Car insurance can be really cheap or extremely expensive, and sometimes, it can seem like one small thing can make a huge difference in how much your premiums cost. There are the obvious factors, like your driving record and the value of the car you drive, that can significantly affect your insurance premiums, but things like your age, sex and ZIP code can make a big difference in price, too.

Even your credit history can make it more expensive to insure your car. It matters more in some states than in others, but before you shop around for car insurance rates, it can be helpful to know where your credit stands. Unless you look at your credit reports, you won’t know if errors are dragging down your scores or if there are small things you can fix to improve your scores in the short term. You can pull your credit reports for free each year at AnnualCreditReport.com and view your credit scores for free each month on Credit.com.

If you’re trying to get the cheapest car insurance you can, where you live will be a huge factor in how much you pay. Each state has different minimum requirements for car insurance, so unless you’re willing to move, there’s not much you can do to minimize the cost of your annual premium. Keep in mind, state-minimum insurance generally only covers a limited amount of others’ medical bills and property damage if you cause an accident, so even if you’re trying to save money, it’s not necessarily the best way to minimize your costs.

CarInsurance.com collected average rates for state-minimum coverage to determine which states had the cheapest bare-bones coverage. (Data comparison company Quadrant Information Services provided the numbers to CarInsurance.com.) Here are the states with the cheapest minimum coverage, based on annual premiums from Progressive, Allstate, State Farm Insurance, Nationwide Insurance, GEICO and Farmers Insurance in 10 ZIP codes.

10. North Dakota

Average Annual Premium: $512

9. Vermont

Average Annual Premium: $487

8. Nebraska

Average Annual Premium: $472

7. Montana

Average Annual Premium: $467

6. South Dakota

Average annual premium: $431

5. Alaska

Average Annual Premium: $426

4. Wyoming

Average Annual Premium: $410

3. Iowa

Average Annual Premium: $403

2. Hawaii

Average Annual Premium: $386

1. North Carolina

Average Annual Premium: $385

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