Are You Paying That Much Or Less?

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People who are living in North Dakota are enjoying the lowest car insurance rates anywhere in the United States, according to the recent survey. If you are feeling otherwise, then something must be wrong with you, kidding.

On the average, North Dakotans are paying $512 a year for their car insurance policies. Iowa, landed on the second spot with just well over $518 a year.

These rates vary year after year, but generally, these rates are being enjoyed by the drivers in the Great Plains (having the lowest rates in the U.S. soil), then followed by those situated in the southeast regions.

So what is the most expensive city?

New Jersey is on top of our list, followed by Washington DC, New York and Massachusetts.  This no longer surprises us because from DC down to Boston – huge bustling cities are everywhere.  As we all know, busy cities with a dense population always equates to heavy traffic and when there is traffic, there is an increased chance of traffic accidents to happen.  Additionally, when there are lots of people, theft and vandalism surge up, which contributes to the rising cost of car insurance.

The same fate is being shared by western states such as in Arizona and Nevada – both of which have bustling cities on their own (Phoenix and Las Vegas).  Drivers from those places are charged with high premium rates for the same reasons.  The State of Florida is an expensive city too for drivers, primarily due to its growing population hence the traffic situation.

Understanding the economic factors

Coincidentally, those places are the most flourishing places in the country. People living in those areas do have high purchasing powers and are able to enjoy the luxury and buy expensive new cars, which of course, are expensive to insure. Additional policies are normally purchased aside from the basic liability coverage in order to protect their investments, which range from home, life to auto protections.

A little more surprise

The survey revealed one another interesting fact, and the spot belongs to Michigan. Despite the fact that a big portion of Michigan is considered to rural (except those living in the southern portion of the state), the state remains to suffer a high cost of auto insurance.

What could have happened? Many factors were seen to have contributed to the increase but one obvious one is the lack of competition. Today, only three insurance companies are sharing the 45% market share. Another possible problem is the “no-fault” insurance law imposed on Michigan’s drivers. In most U.S. states, drivers are only required to carry the minimum basic liability (this will cover the injury and damage to property for the other party) while in Michigan, each driver should carry a personal injury coverage on top of that.

If we are to analyze the whole situation, people in Michigan are forced to pay for their own treatment and property expenses caused by a careless driver.