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Buying full coverage auto insurance is an option for some people, but if you have a car loan or lease, it’s a must-have. Even if you own your car outright, carrying full coverage is a good idea. Without it, you’ll be out of luck if your car is damaged in an accident where you’re at fault or in any situation where there’s no other driver that can be held responsible.

The biggest reason most people skip out on full coverage auto insurance is the cost, but that price can vary quite a bit. Where you live makes a big difference to your insurance bill. Which are the best states for cheap full coverage auto insurance? We’ve got the answer right here.

Of course, there are a lot of factors that affect auto insurance rates, so your full coverage cost may be well above or below the average. But living in a state with a cheap overall average is a good start. Ready to see how your state ranks? Read on.

The 10 States With the Cheapest Full Coverage Auto Insurance

To find the best places to get a good deal on a full coverage policy, we started with the obvious; we looked at the average cost of comprehensive and collision insurance in each state. We then added in the average cost of liability to get an overall average cost for a full coverage policy.

Full coverage is a term that usually refers to an auto insurance policy that includes liability, comprehensive and collision coverage.

Of course, we all know that car insurance rates have a tendency to go up. To factor in the risk of that cheap full coverage policy becoming not so cheap over time, we considered claim frequency. A lower claim frequency means you can count on affordable full coverage car insurance that will stay affordable.

The states below are the top 10 best places to enjoy affordable full coverage auto insurance with a low risk of the costs rising.

#10 – Ohio

Average cost of a full coverage policy: $895
Combined claim frequency: 12.06
Biggest city: Columbus

A full-coverage Ohio auto insurance policy averages less than $900, and drivers with good credit and a safe driving record can enjoy even lower insurance costs.

Ohio’s big cities are the places most like to see higher-than-average rates, where traffic causes more accidents and theft is more likely. Like all of the states on this list, however, Ohio doesn’t have enormous cities on the scale of New York or Los Angeles.

It does, however, have the largest city of any state on our list according to the U.S. Census Bureau, Columbus. Large cities can skew the average cost of car insurance in the state to a higher overall number. People in rural areas likely pay a lot less.

#9 – New Hampshire

Average cost of a full coverage policy: $861
Claim frequency: 13.94
Biggest city: Manchester

With a claim frequency that’s a little higher than Ohio’s, New Hampshire edges it out for the next spot up on the list with a lower average cost of full coverage insurance. A small state with no huge cities and a lot of rural areas generally means lower insurance rates.

New Hampshire stands out on this list as a state that doesn’t require drivers to buy car insurance but does require financial responsibility in an accident.

If you do buy New Hampshire auto insurance, and most people do, there is a minimum requirement.

#8 – Vermont

Average cost of a full coverage policy: $842
Claim frequency: 13.81
Biggest city: Burlington

Vermont has the smallest major city of any state on our list, Burlington, with a population of fewer than 50,000 people. The lack of traffic means a lower collision claim frequency, and claims in this state skew toward comprehensive. Since comprehensive insurance is generally cheaper than collision, that means lower rates.

As a result, auto insurance in Vermont is very affordable, with an average full coverage policy costing only $842 a year. And with no major cities to skew the average, Vermont insurance is affordable statewide.

#7 – Indiana

Average cost of a full coverage policy: $840
Claim frequency: 10.83
Biggest city: Indianapolis

Indiana’s average rate for a full coverage policy is only a few dollars below Vermont, but the state has a lower claim frequency. That’s in spite of being home to several large cities, including Indianapolis.

Claims are pretty evenly split between collision and comprehensive, with neither showing much cause for concern in terms of rates going up in the near future. Indiana has the lowest rate of comprehensive claims of any state on our list, keeping the overall cost of Indiana auto insurance down.

#6 – North Carolina

Average cost of a full coverage policy: $839
Claim frequency: 10.92
Biggest city: Charlotte

North Carolina’s average full coverage policy costs only a little less than Indiana, but you get a little more for your money since the minimum required liability limits here are higher. North Carolina auto insurance law requires 30/60/15 for liability as well as uninsured/underinsured motorist coverage.

Even with the second-largest city on our list, Charlotte, found in North Carolina, rates are low and claim frequency low as well. Like Indiana, North Carolina’s claims are fairly evenly split between comprehensive and collision.

#5 – North Dakota

Average cost of a full coverage policy: $809
Claim frequency: 15.29
Biggest city: Fargo

A full-coverage policy in North Dakota costs quite a bit less on average than the states higher on our list, making up for a higher claim frequency. Why does a state where the largest city is Fargo, with less than 125,000 residents, have more claims?

The majority of North Dakota’s claims are comprehensive, and that may be the result of the weather. Prairie states are prone to heavy storms in both summer and winter, and hail damage is common.

Worth noting is that North Dakota auto insurance law requires a lot of coverage on every car insurance policy, including personal injury protection and uninsured/underinsured motorist coverage. That means the average rate includes more coverage here than in some other places.

#4 – Wisconsin

Average cost of a full coverage policy: $805
Claim frequency: 11.08
Biggest city: Milwaukee

Wisconsin auto insurance isn’t much cheaper than North Dakota but does have a significantly lower claim frequency. Required coverage here includes medical payments (MedPay) and uninsured motorist coverage.

Carrying uninsured motorist coverage can help keep collision claim frequency lower. That’s because in a hit-and-run situation, uninsured motorist coverage can kick in to cover you in some states. If you don’t have this coverage, the claim can also be covered by collision insurance.

Filing a collision claim means you’ll pay a deductible, so if you can use UM/UIM, it’s a better choice.

#3 – Iowa

Average cost of a full coverage policy: $795
Claim frequency: 11.12
Biggest city: Des Moines

Iowa auto insurance falls under the $800 mark for the average cost of full coverage insurance while still having a relatively low frequency of claims. Like North Dakota, storms in the state can increase the number of comprehensive claims, but Iowa’s claim frequency still manages to stay low.

Worth noting is that Iowa does have a lower threshold for legally required liability coverage. That can make overall rates lower, and those wanting higher levels of coverage will pay more.

#2 – Idaho

Average cost of a full coverage policy: $780
Claim frequency: 17.7
Biggest City: Boise

While Idaho has the second-lowest overall average for full coverage insurance, it also has the highest claim frequency on our list. Claims are heavily skewed towards comprehensive; in fact, Idaho has the lowest collision claim frequency of any state on our list.

Idaho has the biggest city of any in the top three, which can mean more comprehensive claims. The weather may also play a role in increasing comprehensive claims, with wildfires common in the state.

With collision claim frequency so low, however, Idaho auto insurance rates are likely to stay low.

#1 – Maine

Average cost of a full coverage policy: $765
Claim frequency: 11.85
Biggest city: Portland

Maine auto insurance rates are the cheapest in the country, and that’s in spite of the highest legal minimum liability limits around (only Alaska has equally high limits) that provide great coverage for your insurance dollar.

Maine’s minimum coverage requirement is 50/100/25, with bodily injury limits that are twice the average require coverage.

Fewer people on the roads here contribute to low claims frequency, and since Portland, Maine, is a really small city, there isn’t much big-city skew to the average rate. Maine has consistently had low insurance rates over the years, and it’s likely to stay that way.

Full Study Results: All States Ranked by Auto Insurance Cost and Claims

The map below shows the average cost of a full coverage auto insurance policy in each state, as well as the total claim frequency. Find your state to see how it stacks up.

It’s not surprising that several of the states that land lowest on the list are those with expensive no-fault insurance. Michigan and Florida are particularly well known for their high cost of car insurance, which many blame on no-fault insurance laws and high rates of insurance fraud.

States with areas of heavy population density also tend to be more expensive for full coverage insurance; New York, for example, is heavily skewed in terms of averages by New York City’s sky-high rates.

Frequently Asked Questions: Auto Insurance Costs and Requirements

If you have more questions about full coverage auto insurance, check below for the answers.

#1 – What state has the cheapest auto insurance rates?

The number one state on our list above, Maine, has the cheapest car insurance in the nation. Average car insurance rates by state vary from year to year, so what state has the cheapest car insurance can fluctuate over time.

Car insurance rates by ZIP code can also vary. So while Maine is the cheapest overall, not every driver in the state will see cheap car insurance rates. Maine is generally a pretty affordable place to live in terms of insurance, though. When it comes to home insurance rates by state, Maine ranks in the 10 cheapest as well.

#2 – What are the top five most expensive states for auto insurance?

The five most expensive states for auto insurance in descending order from most expensive are:

1. Florida
2. New York
3. Louisiana
4. Michigan
5. Rhode Island

Average car insurance rates by state and age, along with other factors, can go up or down over time. The coronavirus pandemic caused many companies to offer discounted rates, so the auto insurance rate increase by state in 2020 looked different from other years.

#3 – What company has the cheapest full coverage auto insurance?

It’s impossible to state that any single company is the cheapest since rates are based on so many factors. USAA car insurance is known for being cheap, but not everyone qualifies for a policy. GEICO also offers cheap rates without eligibility requirements.

#4 – What states have no auto insurance requirement?

Virginia and New Hampshire have no requirement for auto insurance; however, they do require drivers to be financially responsible in an accident. So while you don’t have to carry insurance, it’s the best way to protect yourself from an expensive accident.

Methodology: Ranking the Best States for Cheap Full Coverage Auto Insurance

We gathered rate data from the National Association of Insurance Commissioners (NAIC) for the average cost of liability, comprehensive, and collision coverage in each state. We added those together for an average cost of full coverage insurance.

We then ranked the state by the cost of insurance and factored in the claim frequency for both collision and comprehensive coverage in each state. This data was also drawn from the NAIC.

Claim frequency is calculated by dividing the total number of claims by the total earned exposures (an insurance term for the amount of potential loss on a given policy over time) of the insurance companies in that state. The NAIC  provides claim frequency as a number that has been divided by 100.

The calculation, therefore, is incurred claims/earned exposures x 100 for each type of coverage. We added the two results together for a total claim frequency on full coverage insurance.

States

05.03.2021 /