Drop in the Average Car Insurance Rates by State

It is rare to read these days of a price decrease in any commodity, inured as we are to the rocketing costs of inter alia fuel, coffee and real estate.

The National Association of Insurance Commissioners' announcement, therefore, that the national average car insurance premium fell four years ago by three percent on the previous 12 months came as a welcome breath of fresh air.

This even included a two percent drop in the District of Columbia, which has consistently been the most expensive state in which to insure a car since the NAIC began keeping records. The 2007 study, which was conducted through all the average car insurance rates by state, still found Washington DC to have the highest average car insurance rates by state, at a figure of $1139.82. Only just behind the District of Columbia came New Jersey, recording an car insurance rate of $1103.53, marking a four percent drop on 2006.

With average annual auto insurance premiums markedly over the $1000 line, the other states to make up the five most expensive in the nation in 2007 were New York, Florida and Louisiana.

So to the other end of the spectrum, and the cheapest average car insurance rates by state is in North Dakota, where a three percent drop saw an average annual auto insurance premium set at $511.79; the other four to complete the "cheap list", according to the NAIC study, were Iowa, Idaho, Nebraska and South Dakota.

As the NAIC points out, there is a clear co-relation between, on the one hand, the populous and traffic-congested areas of the United States and, on the other, the more sparsely populated and relaxed-pace locations when it comes to accident statistics; those figures are significant factors (among others such as age, vehicle and driving record) in insurance actuaries' setting of insurance rates.

The bottom line from the NAIC survey was that the average car insurance rates by state fell by $21 in 2007 to a little below $800. The commissioners attribute the decrease to several factors, dominant of which is increased competition among the burgeoning number of insurers. This has meant more selection for buyers, reinforced by heavier use of the internet and all the extra information that can now be so easily garnered.

Best of all, the drop proves that costs, for whatever reasons, can come down; it behooves customers to take advantage of every opportunity to hold them down, and not just accept premium rises as being inevitable.