Want Cheap Car Insurance? These 5 States Have the Lowest Rates – The Motley Fool

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Want Cheap Car Insurance? These 5 States Have the Lowest Rates

Auto insurance is a big part of the cost of driving, but these states make it easier on your pocketbook. Find out if you live in one of them.

Aug 16, 2014 at 1:32PM

Even old cars are expensive to insure. Image source: KB35/Flickr.

With high prices at the pump and the ever-present need for regular auto maintenance and repairs, Americans are frustrated with how much it costs to drive these days. Car insurance is just one more thing that drivers have to worry about, and in many states you’ll pay an arm and a leg for coverage. Yet going without insurance is illegal and carries major financial risks if you’re in an accident.

Some states, however, have managed to stem the tide of rising insurance costs and offer their residents the lowest rates in the nation. Earlier this year, Insure.com looked at every state’s insurance market to figure out which gave drivers the best bargains. Here are the five cheapest states on its list.

Low repair costs can keep insurance rates low. Image source: Christopher Ziemnowicz. Wikimedia Commons.

Idaho edges out Iowa for the No. 4 spot, with an average car insurance rate of $1,053 annually. Like Iowa, Idaho has the advantage of being sparsely populated, with the rural nature of most of the state helping to keep the perils of city driving to a minimum. One report from the National Association of Insurance Commissioners found Idaho’s costs to be the lowest in the nation, again using a slightly different methodology from the Insure.com study but confirming the relative affordability of insurance for state residents.

If you live elsewhere, the prospect of paying these low rates for car insurance might look very appealing. Yet even these reduced costs present a challenge to many drivers, especially in parts of those states where high unemployment rates and low wages make it tough to make ends meet. Still, insurance regulators and other policymakers could learn some lessons from the ways in which these five states keep their costs down, and make them more manageable for their drivers.





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