Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Apr 24, 2020

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Here's what you need to know...

  • Many factors like age, driving record, and credit may impact your car insurance rates
  • PIP covers your medical damages no matter who was at fault
  • Knowing your state laws will also ensure you receive the lowest car insurance rat


Getting the cheapest car insurance depends on a variety of factors, including where you live. Every state law has a different minimum limit for required insurance coverage.

Getting the cheapest car insurance depends on a variety of factors, including where you live. Every state law has a different minimum limit for required insurance coverage.

Most states require a basic policy for liability insurance and some states, especially no-fault states, require Personal Injury Protection (PIP).

Not only does the minimum coverage amount vary from state to state, but state laws vary regarding the setting of insurance rates.

Furthermore, your age, driving record, credit score, type of car, and a host of other reasons can play into the cost of your car insurance.

Car insurance can cost as little as $20 a month, but the coverage will be limited. Most car insurance premiums average around $70 per month.

Do more than just settle for average! Enter your zip in now to get a free car insurance comparison!

Table of Contents

State Insurance Requirements

Every state today, whether a no-fault state or not, requires some form of minimum insurance coverage or proof of financial responsibility. Typically coverage is limited to liability such as bodily injury and property damage, or PIP.

Liability insurance covers damages caused by you to another party’s vehicle. It also covers medical for the other person and their passengers to the extent of coverage you purchased.

PIP covers your medical damages resulting from an accident regardless of who was at fault. It is used in no-fault states to limit lawsuits by making everyone responsible for their medical damages. PIP covers the insured party as well as the passengers in his vehicle at the time of the accident.

Basic state requirements are usually small and can be as low as 10/20/10, which means that your insurance will pay out a maximum of $10,000 for a single person in the victim’s car, $20,000 for all people in the victim’s car, and $10,000 for property damage.

Since the minimum requirements can still leave an insured person at financial risk, it is a good idea to carry more than the bare minimum.

However, the bare minimum is the cheapest car insurance you can get.

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Factors Affecting Car Insurance Rates

Some states allow car insurance companies competition while others are more restrictive. The minimum amounts of coverage vary, which can change the cost of your insurance.

However, other factors also play into the average rates for each state, such as the state income level. Communities within the same state can also have different rates than each other based on a variety of things such as the average crime rate or rural area versus city driving.

If you live in a neighborhood that is high in auto theft or vandalism, your insurance rates will reflect that. Your personal profile will also play a major role in the determination of your car insurance premium. Middle aged experienced drivers tend to pay less than the young and inexperienced drivers or the elderly.

If you drive a high-risk automobile, you may pay more for insurance than you would pay for a car with a lower insurable value. Newer cars tend to cost more to insure for comprehensive and collision while older cars don’t typically  carry that type of coverage.

However, depending on the make and model of the new car your insurance can range drastically. High-end cars with expensive replacement parts tend to cost more to insure than the average low-cost typical car. It is a good idea to call your insurance agent before buying a car to compare insurance rates for different vehicles you’re considering.

You can also lower your insurance premium by purchasing a car equipped with safety and security features. If your vehicle does not come with them, it may be worthwhile to install them aftermarket. The cost of insurance savings usually pays for these devices over the course of your car’s lifetime.

It is also possible to reduce your cost by enrolling in and passing a defensive driving course. Your driving record will have a significant impact on your insurance. Speeding tickets, moving violations, and accidents ticket can raise your rates.

The Cheapest States for Car Insurance

Although every insurance policy is individualized, the base rates are somewhat standardized, making some states repeatedly rank in the lowest percentile for insurance rates. Rural states with a less dense population usually fall into this category.

For example, it is generally easy to get cheap car insurance in Kansas, Oklahoma, Montana, and Wyoming. On the other side, the highest ranking states include Louisiana, Massachusetts, New Jersey, New York, Rhode Island, and Washington, D.C.

Whichever state you live in, you do have some control over the cost of your insurance. Avoid high theft risk cars and high insurance cars if possible.

Do what you can to raise your credit score because a low credit score can have a negative impact on your insurance rate.

Employ safety and security devices in your car, use defensive driving methods, take advantage of all possible discounts offered by your insurance company, and most importantly shop around for the cheapest car insurance you can get.

Enter your zip code in our FREE rate quote tool every time your policy comes up for renewal to ensure you are getting the best rates possible for the coverage you need. Start now!

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