Average Auto Premiums
by State

Take a guess -- which state do you think has the

highest average auto insurance rates? California?

No, California ranks fifth. New York? No, New York

is number 23. Texas? No, Texas is right behind New York,

at 24. Population is clearly not the primary factor in

determining the overall auto insurance rates in a particular state.

OK, OK...we've kept you in suspense long enough. The most expensive state for auto insurance is Louisiana. Yes, Louisiana - by far - with an average annual premium of $2,511. Next up on the list is Michigan ($2,098), followed by Oklahoma ($1,869) and Montana ($1,858).

The recent study conducted by Quadrant Information Services determined the average premiums for more than 2,400 vehicles from the 2010 model year, rated by six major auto insurers. Quadrant examined the rates in 10 ZIP Codes for each state. 

Why would a state like Louisiana produce such astronomical auto insurance rates? The answer is simple: lawsuits and regulations. In Louisiana, the state only permits a jury trial if the claim is in excess of $50,000. Therefore, many cases are negotiated out of court for high settlement amounts. Michigan allows accident victims to collect unlimited medical benefits for life. These are the types of factors that greatly impact auto insurance rates.

Conversely, several states, incuding New York, Florida and others, employ a no-fault auto insurance system. Some no-fault systems are credited for helping to keep auto insurance premiums at bay because consumers are not permitted to sue other drivers for causing an accident, except in severe instances.

Fraud is another problem that leads to higher auto insurance rates. Rampant auto insurance fraud mills in New York led to a spike in insurance rates in the late 1990s, but regulations making it more difficult for unscrupulous operators to file false claims helped to somewhat curtail that state's fraud problem.

Although not necessarily the top factor, population density does impact auto insurance rates. Some of the more sparsely populated states enjoy the some of the lowest average annual premiums, simply because there are fewer vehicles that could potentially collide with each other. This is one reason why Maine ranks at the bottom of the list, with an average annual auto insurance premium of $903.

Check out the complete list of the most and least expensive states for car insurance:

Rank     State    Avg. Premium
1     Louisiana - $2,510.87
2     Michigan - $2,098.29
3     Oklahoma - $1,869.39
4     Montana - $1,857.96
5     California - $1,774.41
6     South Dakota - $1,772.83
7     Washington, D.C. - $1,753.19
8     Georgia - $1,751.42
9     Illinois - $1,679.15
10    Connecticut - $1,678.90
11    Arkansas - $1,648.80
12    New Mexico - $1,603.65
13    Rhode Island - $1,595.97
14    West Virginia - $1,589.69
15    Alaska - $1,572.21
16    Wyoming - $1,552.98
17    Maryland - $1,550.13
18    Kansas - $1,524.51
19    Kentucky - $1,515.30
20    Colorado - $1,480.97
21    Mississippi - $1,474.94
22    New Jersey - $1,473.73
23    New York - $1,463.21
24    Texas - $1,462.65
25    Florida - $1,453.20
26    Pennsylvania - $1,420.78
27    Delaware - $1,405.80
28    Missouri - $1,390.59
29    Minnesota - $1,381.09
30    Alabama - $1,380.38
31    North Dakota - $1,365.22
32    Hawaii - $1,306.97
33    Indiana - $1,302.51
34    Nevada - $1,282.50
35    Washington - $1,279.84
36    Utah - $1,234.30
37    Virginia - $1,233.36
38    Nebraska - $1,210.74
39    Oregon - $1,194.69
40    Idaho - $1,183.47
41    South Carolina - $1,182.18
42    Tennessee - $1,170.12
43    Arizona - $1,152.50
44    North Carolina - $1,130.45
45    Massachusetts - $1,043.80
46    Iowa - $1,039.04
47    New Hampshire - $1,011.23
48    Wisconsin - $1,010.93
49    Ohio - $999.86
50    Vermont - $968.58
51    Maine - $902.85