WalletHub Study Finds States with the Cheapest Average Car Insurance

In nearly every state, drivers are required to hold at least a minimum amount of auto insurance coverage. However, the price of this coverage can depend on several factors, including age, driving record, type of vehicle, and more. Additionally, another major factor in determining price is where the vehicle will be parked and driven. With that in mind, the personal finance site WalletHub recently compiled its 2021 study of which states have the highest and lowest average auto insurance premiums.

With an average annual premium of just $274, Wyoming was found to be the state with the cheapest car insurance. The Equality State was followed by neighboring South Dakota along with Iowa, where average premiums tied at $326. Vermont ($341 average) and North Dakota ($370) rounded out the top five.

On the other end of the spectrum, the state of Michigan was found to have the most expensive car insurance on average. Premiums in the Great Lakes State came in at a whopping $1,908 — nearly seven times what premiums in Wyoming cost. Also nearing the bottom of the list were New York ($1,828), New Jersey ($1,287), Louisiana ($1,263), and Delaware ($1,133).

As part of their study, WalletHub also sampled the cheapest car insurance companies across a number of situations. Overall, Geico came out on top, followed by USAA, Erie, Auto-Owners, and State Farm. Some of the individual “cheapest car insurance” categories that Geico led included young drivers, older drivers, and drivers with poor credit. Meanwhile, when it comes to the cheapest car insurance companies for full coverage, Geico came in second behind USAA. Similarly, for drivers seeking car insurance after receiving a ticket, Erie Insurance was found to be the cheapest option, with Geico again placing runner-up.

Of course, with the United States nearing year two of the COVID-19 pandemic, the demand for auto insurance has evolved in recent months. In fact, a WalletHub survey suggests some 61 million Americans reduced their coverage in the last year due to the pandemic. What’s more, 94 million expect that they’ll be driving less in the future overall and 55 million report having second thoughts about owning a car at all. Notably, while many auto insurers offered additional discounts and payment relief last year, many of these temporary benefits have since expired.

Elsewhere, some other interesting findings from WalletHub show that many consumers have misconceptions about insurance. For example, more than one-third of those surveyed mistakenly believed that their driving record had an impact on their credit scores. Yet, nearly the same amount were unaware that their credit could impact the price they pay for car insurance. Nevertheless, 47% of respondents agree that those with good credit should indeed receive better rates.

Regardless of what state consumers live in or how their driving habits have changed as of late, WalletHub’s survey is another reminder that car buyers should be aware of how much insurance coverage will cost them before purchasing a vehicle. Moreover, with an abundance of insurance — many of which offer quotes and policies via the Internet — it may behoove drivers to compare options if they haven’t for a while. That said, at the end of the day, what’s most important is that consumers retain the right amount of auto insurance coverage for them and work with a company they feel they can trust.

Author

Jonathan Dyer

I'm a small town guy living in Los Angeles looking to make solid financial decisions. I write for a number of finance websites, including HuffingtonPost and Business2Community. I founded DyerNews.com in 2015 to focus on personal finance and the emerging FinTech markets.

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