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New Auto Insurance Data Show Price Influence of State-Specific Factors

New data from the NAIC show the average premium in Iowa in 2009 was about have the size of the average premium in Louisiana.

New data from the NAIC show the average premium in Iowa in 2009 was about have the size of the average premium in Louisiana.

01/20/2012 // USA // [email protected] // Online Auto Insuarnce

New state-specific auto insurance premium data from the NAIC showing that there was a $639 gap in 2009 between the state with the lowest average premiums—Iowa—and the state with the highest average premiums—Louisiana—highlights the wide fluctuation of prices across the country and the many factors that affect the price of coverage, according to Online Auto Insurance.

Industry experts say the best prices auto insurance companies are able to offer for monthly premiums depend on many factors, including the level of coverage required under state laws, the frequency at which state residents file claims, the average cost to companies to settle those claims, and the amount of fraud in the state, along with other determining factors.

The average premium in Louisiana for a policy with liability, collision and comprehensive coverage was $1,270, according to the report from the National Association of Insurance Commissioners (NAIC). That’s more than twice the size of the average in Iowa—$631.

Many in the coverage industry say that Louisiana’s premiums are exceptionally high not necessarily because residents there are bad drivers but because the state’s judiciary does not provide a trial by jury for civil lawsuits under $50,000. According to industry groups, this means insurers do not fare as well when they take claimants to court, and they end up paying more—and requiring more funds from customers—as a result.

Close behind Louisiana was the District of Columbia, which had an average premium of $1,265. Contributing to the district’s high coverage costs is the fact that all of its residents live in metropolitan areas, where accidents typically occur more frequently. Also helping to push up the price of comprehensive coverage, which reimburses policyholders when their cars get stolen, is the high rate of theft in the district. In 2010, the theft-per-registered-vehicle rate there was about 7.5 times higher than the national average.


Luckily for residents of states with high average car insurance rates, companies rate drivers at the individual level and not at the state level. So if a driver has a relatively clean record, he or she might be able to find a policy that is closer to the national average, which the NAIC said was $901 in 2009, as long as they shop around.

To learn more about this and other coverage issues, readers can go to where they will find informative resource pages and a helpful rate-comparison generator.

Social Media Tags:Auto Insurance Data, Online Auto Insuarnce, car insurance, best prices auto insurance companies

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