In every state, there is a wide array of car insurance companies, each employing their unique methods to evaluate risks and determine premiums. These companies take numerous factors into account when pricing coverage, and they also offer various discounts. When providing a quote, the insurer considers every pertinent detail and incorporates any available savings opportunities to arrive at the final price. Therefore, obtaining multiple quotes and comparing them is one of the most effective strategies for reducing premiums. The table below illustrates the average savings achievable in each state by shopping around for vehicle insurance.
One of the primary reasons why many motorists neglect to shop around for lower auto insurance quotes is the misconception that prices are relatively uniform across the market. However, insurance carriers differ significantly in terms of size, expertise, underwriting criteria, historical relationships, and geographical focus, among other aspects. As a result, their prices can vary noticeably as well.
Below study clearly demonstrates large price differences between auto insurance companies. The study got at least 6 different quotes for almost every zip code in a state to come up with the average highest and lowest vehicle insurance quotes for full coverage, which are shown on column 3 and 4. The first column is for the states and the second column shows median cost of a full coverage policy. For each state the price gap between the highest and lowest average are shown in dollar in column 5 and in percentages in column 6.
Table: State by State Average Car Insurance Savings Achieved by Shopping Around
| State | Avg. Annual Premium | Avg. Highest Quote | Avg. Lowest Quote | Average $ savings | Average % savings |
|---|---|---|---|---|---|
| Alabama | $1,313 | $1,895 | $771 | $1,124 | 146% |
| Alaska | $1,114 | $1,305 | $952 | $353 | 37% |
| Arizona | $1,353 | $1,834 | $918 | $916 | 100% |
| Arkansas | $1,383 | $1,849 | $964 | $885 | 92% |
| California | $1,527 | $2,033 | $942 | $1,091 | 116% |
| Colorado | $1,435 | $1,958 | $863 | $1,095 | 127% |
| Connecticut | $1,775 | $2,564 | $924 | $1,640 | 177% |
| DC | $1,722 | $2,876 | $696 | $2,180 | 313% |
| Delaware | $1,655 | $2,422 | $1,107 | $1,315 | 119% |
| Florida | $1,835 | $2,698 | $1,179 | $1,519 | 129% |
| Georgia | $1,348 | $1,795 | $740 | $1,055 | 143% |
| Hawaii | $1,458 | $2,376 | $857 | $1,519 | 177% |
| Idaho | $946 | $1,581 | $694 | $887 | 128% |
| Illinois | $1,009 | $1,393 | $593 | $800 | 135% |
| Indiana | $965 | $1,553 | $650 | $903 | 139% |
| Iowa | $1,024 | $1,625 | $630 | $995 | 158% |
| Kansas | $1,245 | $1,794 | $766 | $1,028 | 134% |
| Kentucky | $1,771 | $2,894 | $880 | $2,014 | 229% |
| Louisiana | $2,190 | $2,984 | $1,445 | $1,539 | 107% |
| Maine | $920 | $1,203 | $503 | $700 | 139% |
| Maryland | $1,396 | $2,223 | $1,071 | $1,152 | 108% |
| Massachusetts | $1,191 | $1,757 | $851 | $906 | 106% |
| Michigan | $2,490 | $4,025 | $1,013 | $3,012 | 297% |
| Minnesota | $1,200 | $1,517 | $899 | $618 | 69% |
| Mississippi | $1,330 | $1,960 | $871 | $1,089 | 125% |
| Missouri | $1,158 | $1,805 | $705 | $1,100 | 156% |
| Montana | $1,224 | $1,753 | $848 | $905 | 107% |
| Nebraska | $1,117 | $1,481 | $697 | $784 | 112% |
| Nevada | $1,750 | $2,284 | $1,279 | $1,005 | 79% |
| N. Hampshire | $1,102 | $1,583 | $557 | $1,026 | 184% |
| New Jersey | $1,353 | $1,887 | $745 | $1,142 | 153% |
| New Mexico | $1,257 | $1,946 | $870 | $1,076 | 124% |
| New York | $1,782 | $2,893 | $992 | $1,901 | 192% |
| N. Carolina | $963 | $1,241 | $620 | $621 | 100% |
| N. Dakota | $1,311 | $2,560 | $743 | $1,817 | 245% |
| Ohio | $957 | $1,312 | $626 | $686 | 110% |
| Oklahoma | $1,655 | $2,593 | $1,006 | $1,587 | 158% |
| Oregon | $1,292 | $1,732 | $944 | $788 | 83% |
| Pennsylvania | $1,532 | $3,183 | $686 | $2,497 | 364% |
| Rhode Island | $1,693 | $2,362 | $1,106 | $1,256 | 114% |
| S. Carolina | $1,263 | $1,528 | $1,030 | $498 | 48% |
| S. Dakota | $1,052 | $1,548 | $685 | $863 | 126% |
| Tennessee | $1,223 | $1,838 | $744 | $1,094 | 147% |
| Texas | $1,308 | $1,947 | $889 | $1,058 | 119% |
| Utah | $1,212 | $1,591 | $653 | $938 | 144% |
| Vermont | $967 | $1,269 | $472 | $797 | 169% |
| Virginia | $979 | $1,192 | $742 | $450 | 61% |
| Washington | $1,197 | $1,498 | $994 | $504 | 51% |
| West Virginia | $1,387 | $1,921 | $1,110 | $811 | 73% |
| Wisconsin | $1,327 | $2,743 | $632 | $2,111 | 334% |
| Wyoming | $1,472 | $1,830 | $1,126 | $704 | 63% |
The study conducted the analysis based on typical car and driver profiles, focusing on full coverage automobile insurance. However, the actual savings individuals can achieve may vary depending on a range of factors, including age, gender, vehicle type, location (zip code), driving history, credit score, and coverage requirements.
It is important to note that the savings mentioned are average figures. Therefore, if you are currently insured with the most expensive provider, you may potentially save significantly more than the average when you switch to the cheapest carrier. Conversely, if you are already with a competitive insurer, your potential savings may be limited.
Geographical location plays a significant role in determining auto insurance rates, as demonstrated in the table above. Price gaps can be substantial in certain areas, while in others, the potential savings may not be as significant. Several factors contribute to these disparities.
The presence of multiple vehicle insurance companies in a region often fosters healthier competition, leading to reduced price differences among providers and lower rates. This phenomenon is often observed in rural states, where average automobile insurance premiums may be higher in smaller towns but lower in larger cities due to the wider agency and brokerage networks that facilitate more extensive shopping around and better deals.
Moreover, higher competition generally offers more opportunities for vehicle owners to save by shopping around, as there is a wider spectrum of companies catering to different market segments. In regions with fewer car insurance providers, such as Alaska, choices are limited, which can have a negative impact on prices. In other words, when only around 20 companies operate in a region like Alaska, these companies can dictate terms more easily than in a state like Pennsylvania, where there are over 200 providers.
Even in states where cost reduction opportunities are relatively limited, such as Alaska, savings of around $350 per year can still be achieved. In other words, vehicle insurance premiums can be reduced by 37%. However, it is astonishing to see that in places like Michigan, savings of up to $3,000 or nearly 300% are possible. Therefore, it is essential to ensure that you are obtaining the best available deal for insuring your car within your specific zip code.
There are numerous reasons why checking the competition and exploring your options at each renewal is important, regardless of the circumstances. If you have a good driving record and have not filed any claims, it is in your best interest to secure the lowest possible car insurance rates. Insurers favor drivers with a clean history, making it advantageous for you to seek the most affordable deal.
On the other hand, high-risk drivers may face premiums that are two to three times higher than those of preferred-risk drivers. Therefore, even a small percentage discount can result in significant automobile insurance savings for high-risk individuals.
While certain factors, such as the state you reside in and your zip code, may be beyond your control, there are various discounts that can be obtained with some effort. For instance, maintaining an accident-free and ticket-free record for 3 to 5 years can qualify you for a good driver discount. Shopping around remains the simplest way to find the cheapest car insurance company that suits your specific circumstances. Obtain quotes from multiple companies to determine if you can save money today.