Drivers in some states are paying far more than those in others.
Motorists living in Michigan are still having to pay the largest auto insurance premiums in the country when compared to the average rates seen among the rest of the states.
This amount was calculated in terms of the percentage of the driver’s annual income.
Michigan residents were the people who pay the largest amount of their income toward covering their auto insurance payments. In fact, the average household pours 8 percent of their annual income into their premiums. In second place was Louisiana, where drivers were paying more than 5 percent of their annual incomes toward their car coverage.
Auto insurance rates vary widely from one state to the next, based on many different factors.
Typically speaking, state auto insurance regulations are one of the most important factors that impact the price that is charged to the consumer. For example, individuals who live in “no fault” states, where the person’s own policy pays for his or her own damages in an accident, regardless of who caused it, will typically pay higher rates. Michigan is among those states.
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On the other hand, Louisiana faces high rates because it is the leading state in the country in terms of the cost of injury claims. Other factors that are worked into the calculation of auto insurance rates include the cost of performing repairs locally, the price of medical care, and the impact of fraud that is occurring within a given state. It also includes the number of drivers who are uninsured, and the percentage of the state’s population that is found in areas of dense population.
Another reason that auto insurance rates are so high in Michigan is that it is not only a no fault state, but it also guarantees unlimited personal injury protection. This increases the risk that an insurer will need to make a larger payout and therefore drives premiums up.
That said, the best way to find auto insurance at the most affordable rate is still to shop around as even within a specific state, there can be a large difference between the quote provided from one insurer and that generated by another.