What Is the Cheapest Car Insurance by State?

Want the cheapest car insurance by state? Compare state minimums, rates, liability, full coverage, discounts & high-risk drivers?

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How Can I Find the Cheapest Car Insurance by State?

It's a frustrating reality that your car insurance premium can feel like a black box, a number that seems to increase for no reason, and a necessary evil that drains your wallet every month. 

You’ve probably asked yourself, “Why am I paying so much for car insurance?” The truth is, the cost of auto insurance is determined by a complex algorithm of personal factors and, most significantly, where you live. 

This article will demystify the process, providing a comprehensive guide to understanding and securing the cheapest car insurance by state, helping you navigate the world of state minimum auto insurance and compare insurance by state to find significant savings.

The Cheapest States for Car Insurance in 2025

The cost of car insurance is not a national constant; it’s a mosaic of different rates influenced by local laws, population density, and claim frequencies. According to data from ValuePenguin, the cheapest states for car insurance in 2025 are Maine, New Hampshire, and Vermont, with average full coverage monthly rates around $103, $107, and $107 respectively. 

These low rates are often attributed to their lower population density, which translates to less traffic and, consequently, fewer accidents and claims.

For those in other parts of the country, knowing the range can be a powerful tool. Idaho, Ohio, and Wisconsin are also among the most affordable, with average monthly premiums for full coverage often under $135. On the other end of the spectrum, states like Nevada, Florida, and Michigan consistently rank as the most expensive, with average monthly rates that can be more than double those in the cheapest states.

Why Do Car Insurance Rates Vary So Much by State?

It’s not just about population; a host of other factors contribute to the wild disparity in car insurance costs from one state to the next. 

According to the Insurance Information Institute (III), these factors include the number of uninsured drivers, the frequency of car accidents and thefts, and the cost of medical care and auto repairs within the state. For example, states with a high number of uninsured motorists often have higher premiums for everyone else to offset the costs of accidents involving these drivers.

• Population Density and Traffic: More people in a smaller area means more cars, more traffic, and a higher risk of accidents. 
• Big cities, like Los Angeles or New York, are almost always more expensive to insure a vehicle in than a rural town.
• State-Specific Regulations: Each state has its own set of laws governing auto insurance. 
• Some states operate under a "no-fault" system, while others use a "tort" or "at-fault" system. 
• A no-fault system means your own insurance company pays for your medical bills and damages, regardless of who is at fault, which can influence overall premiums.

• Cost of Repairs and Medical Care: The average cost of vehicle repair and medical services following an accident can vary dramatically by state. 

• In states with high labor costs or expensive healthcare, insurance companies must charge more to cover potential claims.

• Weather and Natural Disasters: States prone to severe weather events, such as hurricanes, tornadoes, or hailstorms, may have higher comprehensive coverage rates. 

• This coverage protects against damages from non-collision events, and a history of natural disasters makes a region riskier for insurers.

Understanding State Minimum Auto Insurance Requirements

Before you can even begin to compare insurance by state, you need to understand the fundamental requirement: state minimum auto insurance. 

According to FindLaw, nearly every state mandates that drivers carry a certain level of liability insurance. This coverage, often presented in a three-number format like 25/50/25, is the bare minimum required to legally drive a vehicle.

• Bodily Injury Liability: The first two numbers represent bodily injury liability coverage. 
• The first number is the maximum amount your insurance will pay for injuries to one person in an accident you cause. 
• The second is the total maximum the insurance will pay for all injuries in that same accident. 
• For example, in Texas, the state minimum is 30/60, meaning the insurance company will pay up to $30,000 for one person's injuries and up to $60,000 for all injuries.
• Property Damage Liability: The third number is for property damage liability. 
• This is the maximum amount your insurer will pay to repair or replace property you damage in an accident, such as another person's car or a fence. 
• The Texas minimum is 25, so up to $25,000 in property damage coverage.

It's crucial to understand that state minimum auto insurance is designed to protect others, not you. It doesn't cover damage to your own vehicle or your own medical expenses. 

According to Blogger Wealth, choosing only the state minimum can be a risky financial decision, as a serious accident could easily exceed these limits, leaving you personally responsible for the remaining costs.

How to Get the Cheapest Car Insurance By State: 

More Than Just the Location

While location is a primary factor, it's not the only one. Savvy consumers know that a combination of personal choices and proactive shopping can dramatically lower their premiums.

Personal Factors That Influence Your Rate

According to a study by Investopedia, your driving record, age, credit history, and even the type of vehicle you drive are all significant determinants of your insurance rate.

• Driving Record: A clean driving record is the number one way to secure low rates. 
• Accidents, speeding tickets, and other violations signal a higher risk to insurers, leading to higher premiums.
• Age and Gender: Statistically, young, inexperienced drivers (especially teenagers and those under 25) are more likely to get into accidents and therefore face the highest rates. 
• Senior drivers, particularly those over 65, may also see increased premiums.
• Credit History: In many states, your credit-based insurance score is a major factor. 
• Insurers have found a correlation between a good credit score and a lower likelihood of filing a claim. 
• According to a report from the Federal Trade Commission, drivers with good credit often pay less for car insurance.

• Vehicle Type: Insuring a sports car or a luxury vehicle is almost always more expensive than insuring a sedan or an SUV. 

• The cost of the car, its horsepower, and the price of replacement parts all factor into the premium.

Strategies to Lower Your Premiums

Finding the cheapest car insurance by state is a process that requires effort, but the financial rewards can be substantial.

• Shop Around: Never settle for the first quote you get. 
• The best way to compare insurance by state is to get quotes from multiple providers. 
• Websites and independent agents can help you get quotes from dozens of companies at once, like Geico, State Farm, Progressive, and USAA.

• Bundle Your Policies: Most insurance companies offer a multi-policy discount if you combine your car insurance with other policies, such as homeowners, renters, or life insurance.

• Maintain a Good Driving Record: This is a long-term strategy, but it's the most impactful. 
• Safe drivers are rewarded with lower rates and can often earn a "safe driver" discount.
• Ask About Discounts: Always ask your agent or check the company's website for a full list of available discounts. 
• You may be eligible for a discount for being a student with good grades, being a member of certain professional organizations, or having a car with anti-theft devices.
• Raise Your Deductible: A higher deductible means you pay more out-of-pocket after an accident, but it can significantly lower your monthly premium. 
• According to a report by the Insurance Information Institute, increasing your deductible from $250 to $500 can reduce your collision and comprehensive coverage costs by 15% to 30%.
• Consider a Usage-Based Program: Many insurers now offer programs like Progressive's Snapshot or Allstate's Drivewise, which use a telematics device or smartphone app to monitor your driving habits. 
• If you're a safe driver, you can earn discounts based on your actual mileage and behavior.

What About High-Risk Drivers?

If you have a history of accidents, a DUI, or a lapse in coverage, you may be classified as a high-risk driver. This often means facing higher premiums or being denied coverage from standard insurers. However, there are still options. 

According to Direct Auto Insurance, many companies specialize in providing coverage for high-risk drivers, and while the rates will be higher, it's essential to get a policy to avoid driving illegally. Some companies may also require you to file an SR-22 form with the state, which is a document proving you have the required liability insurance.

Full Coverage vs. State Minimum: 

Is the Extra Cost Worth It?

When you compare insurance by state, you'll see a vast difference in price between state minimum and "full coverage." While "full coverage" isn't a single policy, it's a term that typically refers to a policy that includes liability, collision, and comprehensive coverage.

• Collision Coverage: Pays for damage to your own car after a collision with another vehicle or object, regardless of who is at fault.

• Comprehensive Coverage: Protects your car from damages not caused by a collision, such as theft, vandalism, hail, or falling objects.

According to Blogger Wealth, while it's tempting to save money by opting for the state minimum, a single fender-bender or hailstorm could wipe out your savings and leave you with thousands of dollars in repair costs. For most drivers, especially those with a car loan or a newer vehicle, the peace of mind and financial protection provided by full coverage is well worth the additional cost.

FAQ on Finding the Cheapest Car Insurance

Which state has the cheapest car insurance?

• According to a 2025 analysis by ValuePenguin, Maine has the cheapest average car insurance rates for full coverage, with an average monthly premium of $103. 

• This is followed closely by New Hampshire and Vermont.

Is state minimum auto insurance enough?

• State minimum auto insurance meets the legal requirement to drive, but it often provides insufficient financial protection. 

• It typically only covers damages and injuries you cause to others, leaving you responsible for your own vehicle repairs and medical costs. 

• According to the National Association of Insurance Commissioners (NAIC), it's highly recommended to carry more than the minimum coverage to protect your assets.

How can I lower my car insurance premium?

• You can lower your premium by shopping around and comparing quotes from multiple companies, maintaining a clean driving record, raising your deductible, bundling multiple policies with one insurer, and asking about various discounts, such as a good student discount or a safe driver discount. 

• According to Investopedia, installing an anti-theft device can also lead to savings.

Do car insurance companies check my credit score?

• Yes, in most states, car insurance companies use a credit-based insurance score as part of their rating process. 

• According to the Federal Trade Commission, studies have shown a correlation between a consumer's credit history and the likelihood of them filing an insurance claim. 

• A higher score often leads to lower premiums. 

• However, some states, like California and Massachusetts, have laws that prohibit the use of credit history in setting car insurance rates.

What is the difference between liability and full coverage?

• Liability coverage is the basic, legally-required insurance that pays for damages and injuries you cause to others. 

• Full coverage is a term for a policy that includes liability plus collision (for damage to your car in an accident) and comprehensive (for damage from non-collision events like theft or weather). 

• According to Liberty Mutual, while not a single policy, it provides a more complete financial safety net.

How often should I compare insurance by state?

• It's a good practice to compare insurance quotes at least once a year, or whenever a significant life event occurs, such as a marriage, moving to a new state or zip code, or buying a new car. 

• According to a report by NerdWallet, shopping for new quotes every six months can result in an average savings of $400 or more annually.

Final Recommendations & Call to Action

The journey to finding the cheapest car insurance by state is a personal one, but it is a journey that can lead to a more secure and wealthy financial future. By understanding the factors at play and taking proactive steps to compare insurance by state, you can transform a stressful monthly expense into a manageable part of your budget. Don't be a passive consumer; be an informed one.

Take action today: Get a few quotes from different providers and see how much you could be saving. Share this article with a friend who is also tired of high insurance premiums. Your opinion matters, and we’d love to hear about your experience in the comments below. 

What strategies have you used to find the best rates? Let’s start a conversation and build a community of financially savvy drivers.

The road to financial freedom is paved with smart decisions, and finding the right auto insurance is one of them.

Author Profile

Ompe Pope is a passionate personal finance expert and the author behind Blogger Wealth, a brand dedicated to helping individuals build and maintain financial prosperity. 

With a focus on real-world, actionable advice, Ompe empowers readers to take control of their finances, from understanding complex topics like car insurance to building long-term wealth. 

He believes that true wealth is not just about money, but about having the freedom to live life on your own terms.

Original References

• ValuePenguin. "Car Insurance Rates by State: 2025 Comparison." ValuePenguin.com.

• Investopedia. "15 Tips and Ideas for Cutting Car Insurance Costs." Investopedia.com.

• FindLaw. "Car Insurance Laws by State." FindLaw.com.

• Insurance Information Institute (III). III.org.

• Federal Trade Commission (FTC). "Credit-Based Insurance Scores." FTC.gov.

• Direct Auto Insurance. "High Risk Car Insurance: 4 Things to Know." DirectAuto.com.

• Liberty Mutual. "Full coverage car insurance." LibertyMutual.com.

• NerdWallet. "How to Save on Car Insurance." NerdWallet.com.