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Car insurance is a requirement in almost every state, but if you live in a high-premium state, you may be paying far more than you’d like. While some factors driving those costs are out of your control, you may be able to lower your premiums without sacrificing coverage. Understanding why rates are higher in some states — and what you can do about it — can help you make smarter decisions and save money on your policy.
Why some states have higher car insurance rates
Car insurance premiums vary widely by state, and it’s not just about how safely you drive. State regulations, traffic density, and even weather patterns can influence the cost of coverage.
For example, states like Michigan, Florida, California, and Louisiana consistently rank among the most expensive for auto insurance. These states often have specific laws, such as no-fault insurance requirements or high minimum limits, that can drive up premiums for everyone. Others face more frequent natural disasters or have higher rates of uninsured drivers, all of which increase the cost insurers bear and pass on to policyholders.
What drives rates up in high-premium states
There’s no single reason why auto insurance is more expensive in certain areas. Instead, multiple factors combine to make rates higher, including:
- Higher rates of accidents and claims. More accidents mean more claims in urban areas or states with dense traffic.
- Weather-related risks. States prone to hurricanes, flooding, or hailstorms see more vehicle damage, leading to higher costs.
- Litigation frequency. In states where lawsuits following accidents are common, insurers pay more in legal fees and settlements.
- Uninsured drivers. A higher percentage of uninsured motorists means insurers must charge more to offset those risks.
- State regulations. Laws requiring higher minimum coverage limits or certain types of coverage, such as personal injury protection, can drive up costs.
How to lower your car insurance premium in high-cost states
You can still reduce your car insurance premiums even in the most expensive states. Here are some strategies that can help:
Opt for a usage-based program
If you don’t drive much — say, you commute by subway or work from home — some insurers can help you save money by tracking your mileage and driving habits.
Reduce coverage if you can
While high-premium states like Florida and Michigan require personal injury protection (PIP), the laws around it vary. In Michigan, recent no-fault reforms allow you to choose lower PIP coverage levels if you have qualified health insurance. Comprehensive and collision coverage are optional in every state, and if you carry them, lowering the coverage limits can help reduce your premiums.
Keep in mind that if you’re financing or leasing your car, certain coverages like collision and comprehensive aren’t optional — your lender requires them. And even if your car is fully paid off, it’s worth seriously considering whether dropping that coverage is the right move. Without that protection, you’d be on the hook for repairs or a replacement if something happens and you can’t afford the cost out of pocket.
Shop local insurers
Big-name insurers aren’t always the cheapest in high-risk states. Smaller regional insurers often cater better to local drivers and may have lower rates or more generous discounts.
“Rates can vary significantly between providers for the same level of coverage, so working with an independent agent and comparing quotes from multiple carriers is a great start when searching for the most affordable policy,” says Nick Ramirez, agency owner at Goosehead Insurance. “This not only streamlines and eases the process, but independent agents have access to a wider range of carriers to help you find the best coverage for home, auto, or life at the most affordable price.”
Improve your credit score
If you’re in a high-premium state like Florida or New York, even modest improvements in your credit can result in lower premiums, as it’s legal in these states for insurers to use something called an “insurance score” that functions like a credit score to determine your premiums. Check your credit, pay off balances, and avoid hard pulls when possible.
Take advantage of defensive driving courses
Completing a state-approved defensive driving course can shave 10% or more off your premium for several years. Bonus: you can often take them online at your own pace.
Install anti-theft or safety devices
Features like GPS tracking systems, car alarms or electronic stability control can reduce your premium.
Increase your deductibles
In states with higher-than-average premiums, increasing your comprehensive or collision deductible from $500 to $1,000 can yield noticeable monthly savings.
“Just make sure you choose a deductible amount you can comfortably afford in the event that you need to file a claim,” says Ramirez.
Ask about low-mileage discounts
Let your insurer know if you log fewer miles than the average driver. This is especially relevant in places like New York City or Miami where many people rely on public transportation or work remotely.
Bundle your coverage
Bundling your auto policy with home, renters or even life insurance can be particularly effective in high-premium states. Insurers often offer steeper discounts in expensive markets to earn more of your business.
“Bundling your home and auto insurance policies with the same carrier can also lead to significant savings, often up to 20% or more,” Ramirez says. “Some independent insurance brokerages can even offer bundling discounts across different insurance providers.”
Review your policy every renewal period
In high-cost states, where premiums are already steep, rates can climb even more without much warning — often due to the same factors that made them expensive to begin with, like frequent natural disasters or higher crime rates.
Whenever your policy is up for renewal, you may be able to save money by shopping around for better rates from an insurer that doesn’t hike prices as much.
How to compare quotes effectively in high-cost states
When you live in a high-premium state, it’s essentially to compare rates to make sure you’re paying the right amount for your coverage.
Start by gathering quotes from national carriers like GEICO, Progressive and State Farm, and regional insurers operating primarily in your state or neighboring areas. Regional providers often understand local risks better and may offer lower rates or more flexible coverage options that reflect the true driving conditions where you live.
When comparing options, ensure you’re looking at more than just the monthly premium. Pay close attention to the coverage limits, deductibles, included extras and any policy fees that you may have to pay for a traffic violation on your record. Our comparison tool allows you to see multiple insurers’ rates side-by-side.
It’s a good idea to shop for new quotes every six to 12 months, even if you haven’t had a major life change. Rates can fluctuate due to broader economic shifts, changes in your credit score, updates to your driving record or even new legislation in your state.
Common mistakes drivers make in expensive insurance markets
Even savvy drivers can make missteps that cost more in the long run. Here are a few common pitfalls to avoid:
- Focusing only on price. Choosing the cheapest policy without considering what it actually covers can leave you underinsured.
- Forgetting to update your policy. Life changes like a new job, marriage or moving can impact your rate. Not updating your information could cost you.
- Letting your policy lapse. A coverage gap can lead to significantly higher premiums when you reinstate.
- Ignoring discounts. Many drivers miss out on savings simply by not asking about available discounts or failing to meet simple requirements.
- Not reassessing coverage as your car ages. Holding onto comprehensive and collision coverage for a car that’s no longer worth much may not make financial sense.
By understanding the factors that affect your rates and taking proactive steps to reduce them, you can still find affordable coverage in a high-premium state. From adjusting your deductible to reevaluating your coverage needs, small changes can add up. Regularly shopping around and staying informed is the key to keeping your insurance budget in check, especially if you live in an area where high premiums only seem to increase.
