In the past year, you might have noticed the cost for certain items, like groceries, gas and homes, increasing. But what about car insurance? The Zebra’s 2022 State of Auto Insurance report found that car insurance is more expensive than last year, with an average annual rate of $1,529 — a 3% increase from 2020. Since 2011, rates have skyrocketed 28% nationally.
However, even though the national average cost for car insurance rose by 3%, the impacts differ across the U.S. Car insurance rates increased in 38 states and fell in 13 states. Below, we’ve calculated which states experienced the biggest jumps and decreases in car insurance rates (ranked by % change) and why some of these changes happened.
In the top spot on our list by degree of change is Louisiana. The state saw a whopping 41.7% increase, leading it to also take the top spot for most expensive insurance in the nation.
Let's consider some of the reasons for this big jump. First, Louisiana experienced significant weather events from hurricanes and flooding which impacted insurance claims. More on how weather impacted insurance last year here.
In 2021, State Farm stated that it would raise insurance rates because more drivers were on the road than in 2020, which resulted in more accidents and claims. Also in 2021, Louisiana passed a law that was meant to help lower insurance rates for drivers by forcing more frequent jury trials rather than trials in front of a single judge for car accidents. The goal of this new structure would be to lower the amount of money victims would get from insurance companies, and then those savings are passed down to policyholders through reduced rates throughout the state. Some state officials are claiming that because the law just went into effect in 2021, it’s too early to tell if it’s having an impact on insurance rates.
Louisiana by the numbers
Average insurance premium 2020: $2,304.49
Average insurance premium 2021: $3,265.21
Percent change year over year: 41.7%
#2. Rhode Island
While significantly less than the increase Louisiana saw, the smallest state in the U.S. also had the second largest increase in insurance premiums in 2021.
Ohio is another state that consistently ranks near or at the top of the cheapest states for auto insurance.
Even though it experienced an 11.10% jump in insurance rates, the average annual premium is still pretty low at $1,028.49. We believe that insurance costs are rising in these traditionally cheaper states due to people returning to their pre-pandemic driving habits and generally being on the road more. And when you have a lower number to start with, any increase makes up a larger percentage change.
Ohio by the numbers
Average insurance premium 2020: $925.65
Average insurance premium 2021: $1,028.49
Percent change year over year: 11.1%
In Vermont, average annual premiums went from $1,056.44 in 2020 to $1,158.25 in 2021 — a 9.60% increase.
While rates are rising in the state now, there was actually a period between 2015 and 2018 where rates went down by $1 each year. This is another state where the rate increase might be due to more residents driving than in 2020.
Vermont by the numbers
Average insurance premium 2020: $1,056.44
Average insurance premium 2021: $1,158.25
Percent change year over year: 9.6%
#6. South Dakota
Between 2015 and 2018, car insurance rates in South Dakota increased by an average of $201 per year, and they’re still rising.
However, South Dakota was one of many states that saw a significant dip from 2019 to 2020 due to reduced driving in the COVID-19 pandemic — to the tune of a 17% decrease. To make up for this decrease the previous year and to account for more South Dakotans back on the road, from 2020 to 2021, rates rose by $137.16.
What accounts for this reduction in rates? One possible cause is that the roads in the state were a little bit safer than the year before. In 2021, Maryland saw fewer fatalities from motor vehicle crashes than in 2020, and observed seatbelt usage increased in 2021 as well.
Maryland by the numbers
Average insurance premium 2020: $1,436.05
Average insurance premium 2021: $1,304.60
Percent change year over year: -9.2%
Alaska is another state that saw a significant decrease in car insurance rates. Rates dropped about 8.90%, bringing the average annual premiums to $1,262.34.
In 2020, Alaska was ranked by the NHTSA as the state with the worst drivers in the country. It’s possible that rates fell in the state in 2021 because Alaskan drivers turned their act around and were more cautious on the roads and filed fewer claims than in the previous year.
Alaska by the numbers
Average insurance premium 2020: $1,396.89
Average insurance premium 2021: $1,272.34
Percent change year over year: -8.9%
In Illinois, average car insurance premiums jumped from $1,284.62 in 2020 to $1,394.50 in 2021 (a $109.87 increase!).
In what is by now an all too familiar refrain, State Farm claimed they raised rates in the state because driving and claim volume increased in 2021.
Illinois by the numbers
Average insurance premium 2020: $1,284.62
Average insurance premium 2021: $1,394.50
Percent change year over year: 8.6%
#10. New Mexico
Rounding out our top 10 movers and shakers this year is New Mexico. Average annual car insurance premiums rose in the state by $101.82. Like in the other states that experienced increases, this increase could be because more people are getting behind the wheel, increasing the number of claims.
New Mexico by the numbers
Average insurance premium 2020: $1,273.55
Average insurance premium 2021: $1,375.37
Percent change year over year: 8%
Did insurance rates go up where you live? If you're seeing an increase in your rate, consider comparing insurance rates to see if you could be saving.
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