Which U.S. State Has the Cheapest Auto Insurance Premiums?
by Christy Bieber | Published on Sept. 13, 2021
Is it the state where you live?
Auto insurance is required by every state in the United States, although the specific coverage requirements can vary considerably by location. The costs of getting covered can also vary substantially from one place to the next.
So which state in the U.S. has the cheapest insurance premiums of any of the locations in the country?
This state has the cheapest average auto insurance premiums
According to The Ascent's data, the state with the cheapest auto insurance premiums in the country is Hawaii. And the state in the continental U.S. with the cheapest average premiums is Ohio.
In Hawaii, the average auto insurance premium comes in at just $1,096. And in Ohio, the average auto insurance premium totals $1,567. In both of these states, the premiums are well below the national average premium of $2,646. And they are a small fraction of the average annual premium of $4,894, which is the average in the country's most expensive state for auto insurance -- Michigan.
One big reason why insurance in Ohio is so inexpensive is that there is a lot of competition within the local insurance market. In fact, there are more than 250 different insurance carriers that drivers can choose to buy car insurance coverage from. With so many different auto insurance companies competing for business, prices are inherently going to be lower than in other markets where there may be fewer options for consumers.
And as for Hawaii, anti-discrimination laws prohibit insurers from considering certain factors such as credit score or gender. This helps make average premiums lower for everyone because insurers aren't necessarily able to charge very high premiums to motorists presenting more risk.
Drivers should still shop around to save on insurance
While it may be cheaper to buy insurance in Hawaii or Ohio than in many other parts of the country, this doesn't mean that all motorists can count on getting inexpensive premiums when insuring their vehicles.
Drivers still need to do their due diligence and make sure they're getting car insurance quotes from multiple insurance providers in order to get the best rates for their coverage. This is easy for motorists to do online, and drivers should get quotes at least once a year because the available insurance options can change, and another carrier can become cheaper over time.
Motorists should also be sure to ask their insurer about insurance discounts that may be available. It's often possible to reduce premiums further by taking steps such as:
- Bundling multiple insurance policies with the same carrier
- Completing a defensive driving class
- Working for a specific employer
- Being a member of a group or organization that entitles drivers to discounts
By taking the time to compare insurance options regularly and by asking about opportunities to save, drivers in these affordable states have the potential to pay very low insurance premiums for essential protections. Policyholders just need to remember not to compromise coverage or quality just for low prices alone. But since insurance is so cheap, drivers shouldn't have to do that to get a good deal on their auto insurance in Ohio or Hawaii.
Our best car insurance companies for 2022
Ready to shop for car insurance? Whether you’re focused on price, claims handling, or customer service, we've researched insurers nationwide to provide our best-in-class picks for car insurance coverage. Read our free expert review today to get started.
About the Author
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.