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Most Expensive State for Car Insurance: Michigan

Michigan’s average annual premium is $2,394, which is 82 percent higher than the national average of $1,076, according to an analysis by Insure.com.

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For the fourth consecutive year, Michigan holds the dubious distinction of being the most expensive state for car insurance.

Michigan’s average annual premium is $2,394, which is 82 percent higher than the national average of $1,076, according to an analysis by Insure.com. Michigan’s average annual premium is a whopping 177 percent higher than the cheapest state for car insurance – Maine.

To put the disparity in context: The average rate for insuring a 2017 Toyota Camry LE in Michigan is $2,711. In Maine, you can insure the same vehicle for $945.

“Michigan residents can blame their unique no-fault system for their high cost of auto insurance,” said Penny Gusner, consumer analyst for Insure.com. “It allows for unlimited medical benefits for injuries sustained in auto accidents and a lot of fraud arises – the result is exorbitant car insurance premiums for car owners.”

Louisiana ranks No. 2 on the list of the most expensive states, with an average annual rate of $1,921. Insure.com attributes Louisiana’s high insurance rates to the state’s “litigious culture.”

“When large claims are continually paid out, insurance companies raise all policyholders’ premiums to cover these settlements,” the website said.

The average annual premium in Maine is $864, according to Insure.com. This marks the third year in a row that website has ranked Maine as the cheapest state for car insurance.

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Ohio ($919) and Idaho ($942) rank No. 2 and No 3, respectively.

“States with cheaper car insurance rates tend to be more rural regions of the nation,” Gusner said. “A higher concentration of motorists in metro areas leads to crashes, claims and thus higher auto insurance rates. Car insurance companies see rural regions with less traffic to be less of risk and, thus, charge less.”

The top five most expensive states for car insurance are:

State Average annual rate Compared to national average
1. Michigan $2,395 82% higher
2. Louisiana $1,921 46% higher
3. Connecticut $1,897 44% higher
4. Rhode Island $1,848 40% higher
5. Florida $1,840 40% higher

The top five cheapest states for car insurance are:

State Average annual rate Compared to national average
1. Maine $864 34% less
2. Ohio $919 30% less
3. Idaho $942 29% less
4. Vermont $948 28% less
5. North Carolina $1,010 23% less

To come up with the rankings, Insure.com commissioned Quadrant Information Services to calculate auto insurance rates from six large carriers – Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm – in 10 ZIP codes per state. Quadrant compiled the data in May 2017.

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