Why Do Car Insurance Rates Differ By State

Accidents Per States

Insurance rates can vary based on the area and the number of accidents in a certain location.

Do car insurance rates differ by state? They certainly do. They differ by state, city, and zip code. They differ by make of car and by driving record of the applicant.

There are reasons for this difference. One of the major reasons is the insurance loss experienced in a state or a zip code. Which model of car has a better safety record? Is a part of a city or between adjacent states different or nearly the same?

The rates, which are quoted, are derived at by actuarial statistics. The compilation of data about size of city and accidents within a state can make for distinct rate differences by states. Obviously severe traffic situations are more likely to have more accidents than the wide-open spaces of Nevada or Wyoming.

The lack of other cars on the road lends itself to less vehicle accidents. Fewer accidents mean fewer claims and lower rates. Each state has its own requirements as to the coverage that an insured must carry. Each state has laws on the books as to the coverage needed to license and drive a car in that state. These different requirements can also contribute to differing car rates in one state versus another.

Some states have much better road systems than their neighbor and that factor can also contribute to the driving safety in a state. The accident rate of a state can drastically affect the rates for car insurance. This has nothing to do with an individual’s driving history or ticket history. Those rate factors come into play after the residency is known. The amount of driving distance a person does also affects the rate.

Collision rates can vary due to the cost of repairs in one state versus another state. The number of lawsuits in a state can also affect the rate. A litigious state will have higher rates than one that is not so quick to go to court.

If a person has the choice of which two states to live in, it might be a good idea to check rates in both states. This could be true for other consumer insurance needs. The answer to the question, “Do car insurance rates differ by state?” is yes. The rate can be substantially different for the same driver with the same car and the same driving history. Where the car is parked at night and the amount of daily driving distance will affect the rate. Shop and compare is the word to the wise.

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