First, the good news – the average car insurance rates for September 2009 decreased, some as much as 32%.
The bad news – annually, we’re still paying about 12% higher this year for car insurance compared to last year.
Car Insurance Premium Index (CPI) tracks the nation’s insurance rates, both annually and monthly. According to its data, September showed a significant decrease in auto insurance rates nationwide (some states such as Florida, California and Washington showed decreases ranging from 13% to 16%; other states like Nebraska, Idaho and Wisconsin saw rates decrease as much as 25% to 32%). The average percentage rate was about 11.28%, with average car insurance rates around $1,674, annually. This will help you determine the average car insurance rate in your area.
What states are the highest and lowest when it comes to average car insurance rates?
The top five highest states, with averages from $1,069 to $1,164 are:
1. D.C.
2. New Jersey
3. Louisiana
4. New York
5. Florida
The top lowest states, with averages from $579 to $530 are:
1. North Dakota
2. Iowa
3. South Dakota
4. Idaho
5. Kansas
How can I find what the average car insurance rate is for the state in which I reside?
Because insurance premiums are based greatly on your zip code, your best bet is let the internet do the searching for you. There are some websites that will provide the data mentioned above, which will give you a state-by-state breakdown of the average car insurance rates. Research and comparative shopping are your best tools for finding the lowest insurance coverage in your state.
How is my car insurance rate determined?
The first information most car insurance websites ask for is your zip code and age. These two factors start the process. After that, other factors include gender, marital status, prior accidents, driving violations, credit rating and type of vehicle. Also taken into consideration are the number of miles you drive to and from work, whether use of the vehicle is business or personal, and the annual number of miles driven.
Why do insurance rates vary so much from state-to-state?
There are several factors that insurance companies use to calculate premiums. According to the National Association of Insurance Commissioners (NAIC), when insurance companies calculate premiums, they consider what consumers actually spend for the insurance premium per vehicle – not the sum of liability, collision and comprehensive because not all consumers purchase all three coverages.
Another factor that is used to calculate premiums is the state’s economy – if it’s healthy and thriving, the premiums could be more because people are more likely to purchase new or newer cars, which in turn, would mean more coverage. Traffic/population density and per capita income also have significant impact on each state’s premiums. The latest NAIC report shows that states with some of the higher premiums tend to be highly urban, higher wage and consumer spending, and greater traffic density.
State laws can also greatly affect insurance premiums. In states that require minimum bodily injury coverage or liability coverage, can inflate insurance premiums. There are only three states that do not require liability coverage: Tennessee, New Hampshire and Wisconsin.
What can I do to get lower premiums if I live in a state that has some of the higher premiums?
Make sure you’re getting the all the discounts that are offered, such as:
- Driver’s education school certification for the young drivers in your household;
- Airbags and other passenger restraints;
- Multi-vehicle discount;
- Age and correct number of miles driven per year;
- Good driving record;
- Long-term customer;
- Anti-lock brakes; and,
- Anti-theft system.
Make a checklist and be sure to let your agent know about these features. Also if you only need insurance for a short time, short term car insurance is also available.
Do your homework and some comparative shopping – this will save you time and money.
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