Montana Finance

Feb 18 2019

Highest and lowest car insurance rates by ZIP code, lowest car insurance rates.

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Most and least expensive ZIP codes for car insurance by state

Lowest car insurance rates Lowest car insurance rates Lowest car insurance rates Lowest car insurance rates

The highest car insurance rates in the nation belong to Detroit, according to CarInsurance.com’s analysis of rates for a 2016 Honda Accord with full coverage for nearly every ZIP code in the country.

ZIP codes in Brooklyn, New York and New Orleans, Louisiana rank second and third, respectively, behind Detroit, Michigan.

Lowest car insurance rates

Drivers can enter a ZIP code in CarInsurance.com s average car insurance rates tool to see the average premium for the location, as well as the highest and lowest rates. You can get a customized rate by choosing from among six age groups for men and women and three coverage levels.

Rankings were determined by identifying the highest ZIP code for car insurance in each state and then listing them in descending order.

The top 10 most expensive ZIP codes by state for full coverage car insurance are:

1. Detroit, Michigan, in ZIP code 48227: $7,415

2. Brooklyn, New York, in ZIP code 11212: $4,440

3. New Orleans, Louisiana, in ZIP code 70117: $3,747

4. Coral Gables, Florida, in ZIP code 33135: $3,310

5. Philadelphia, Pennsylvania, in ZIP code 19132: $3,189

6. Las Vegas, Nevada, in ZIP code 89101: $2,705

7. Providence, Rhode Island, in ZIP code 02909: $2,573

8. Los Angeles, California, in ZIP code 90010: $2,552

9. Baltimore, Maryland, in ZIP code 21216: $2,423

10. Essie, Kentucky, in ZIP: code 40827: $2,405

To find the most expensive ZIP code for car insurance in every state, see the table below.

Car insurance companies assess many factors when setting rates, and your location is chief among them. Based on the number and severity, or cost, of car insurance claims within the area, insurers assign ZIP codes different risk levels. Insurers take into account the frequency of thefts, collisions and vandalism to gauge the likelihood of such incidents happening to drivers within the ZIP code. This is used as the base rate from which insurers calculate your premium. Other pricing factors, such as your driving record, type of car you drive and your age are then added into the calculation. Every car insurance company uses its own base rate and formula, which is why rates can vary so much, and why it’s important to comparison shop.

The least expensive locations for full coverage car insurance rates are:

1. Fremont, Ohio, ZIP code 43420 and Coldwater, Ohio ZIP code 45828 (tie): $804

2. Swannanoa, North Carolina, in ZIP code 28778: $813

3. Normal, Illinois, in ZIP code 61761: $818

4. Blacksburg, Virginia, in ZIP code 24060: $819

5. Lafayette, Indiana, in ZIP code 47901: $838

6. Boise City, Idaho, in ZIP code 83706: $855

7. Biddeford, Maine, in ZIP code 04005: $861

8. Nantucket, Massachusetts, ZIP code 02554 and Siasconset, Massachusetts ZIP code 02564 (tie): $877

9. Ames, Iowa, in ZIP code 50012: $907

10. Watertown, South Dakota, in ZIP code 57201: $913

CarInsurance.com’s analysis showed a national average rate of $1,355 for full coverage, and several locations, including San Jose, California, and Scottsdale, Arizona, mirror that average.

To find the least expensive ZIP code for car insurance in every state, see the table below.

Motor city madness: Why are car insurance rates so high in Detroit?

Detroit is notorious for having the most expensive car insurance rates in the nation, due to a variety of factors:

  • Unlimited no-fault laws — The state s unique no-fault insurance laws mandate lifetime medical care for those injured in car accidents, beyond what their health insurance pays. It also provides up to about $5,400 per month in lost wages for up to three years, regardless of who caused the accident.
  • Exorbitant Personal Injury Protection (PIP) claim costs PIP is medical coverage for those injured in car accidents. The average payment per paid PIP claim increased 72 percent in Michigan, from $25,997 to $44,756, from 2005 to 2013, according to the Insurance Research Council. That s significantly higher the 38 percent jump in the average cost per claim, from $5,802 to $8,017, for PIP claims nationwide.
  • Fraud: Critics of the no-fault laws in Michigan say that the system is vulnerable to fraud, as aggressive lawyers contribute to escalating numbers of lawsuits and seek to cash in by shuttling clients into unnecessary and costly medical treatments. This is compounded by hospitals charging higher fees for patients injured in car accidents, compared to standard patient costs. The state also lacks an insurance fraud oversight board or committee.
  • Uninsured motorists: Michigan has one of the highest uninsured driver rates, with an estimated 21 percent of motorists going without insurance, according to the latest Insurance Research Council study. But estimates for the uninsured rate in Detroit are even higher. In a commentary for the Coalition Protecting Auto No-Fault, Melvin Butch Hollowell, former Michigan insurance consumer advocate, put the number at 60 percent.
  • Economic struggles: In Michigan, car insurance companies review credit histories when setting rates, and those with poor credit pay are seen as high-risk by insurers, so they are charged more money. Sixty-six percent of Detroit residents have subprime credit scores (or no scores at all), according to a 2016 analysis by the Urban Institute.
  • High theft rates: There were 382 car-jackings and 8,534 stolen vehicles last year in Detroit, according to a report compiled in January by Detroit Chief of Police James Craig. The city s population last year is pegged at 677,166, giving the Motor City a car-theft rate of 1,316 per 100,000 population. That compares to the FBI s stolen-car rate of 220 per 100,000 inhabitants for the country.

Rural areas generally cheaper than urban areas for car insurance

The cheapest ZIP code for car insurance, Fremont, Ohio, is about 40 miles from Toledo and has a population of about 17,000. Freemont is typical of locations that tend to have low car insurance rates. Drivers in rural areas generally pay less than drivers in urban areas. Rural areas have fewer cars on the road, so costs for insurers are lower because there are fewer accidents, claims and thefts.

Each state s car insurance laws also come into play, as some state minimum liability requirements are much lower than others. Ohio has minimum limits of 25/50/25 for liability, with no requirement for PIP, which helps keep down rates, says Penny Gusner, consumer analyst for CarInsurance.com. Ohio also has a healthy car insurance market. With plenty of regional and national auto insurers, motorists have companies competing for their business and can readily obtain low car insurance premiums by shopping around and comparing rates.

CarInsurance.com commissioned Quadrant Information Services to provide a report of average auto insurance rates for a 2016 Honda Accord for nearly every ZIP code in the United States. We calculated rates using data for up to six large carriers (Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm).

Averages for the default result on the average rates tool are based on full coverage insurance for a married 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/100 ($100,000 for injury liability per person, $300,000 per accident and $100,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. The rate includes uninsured motorist coverage. Rankings are based on this default driver profile. ZIP codes in ranking were the highest ZIP code for car insurance in the state, ranked by descending order. Rankings for the cheapest ZIP code were in ascending order from lowest premium.

Averages for customized rates in the tool are based on drivers ages 20, 30, 40, 50, 60 and 70 for the following coverage levels: state minimum liability, liability of 50/100/50 and 100/300/100 with $500 deductible on comprehensive and collision. These hypothetical drivers have clean records and good credit. Average rates are for comparative purposes. Your own rate will depend on your personal factors and vehicle.


Written by MICHIGAN


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