Cheapest Car Insurance by Age and State

Originally published in CarInsurance.com. Go to the CarInsurance page to see the complete work, including search about charts.

Lowest insurance rates by age and state

South Dakota, North Carolina and Idaho have the cheapest car insurance rates in the country among six age groups, based on a rate analysis by CarInsurance.com.

Here are the cheapest states for car insurance by age group:

Location plays a major role in the cost of insurance. Our analysis found that rural states are more likely to have lower car insurance rates than congested states with large cities and suburbs.

When creating rates, car insurance companies look at the cost and frequency of claims in areas. Places with more crime, such as car thefts and break-ins, usually have higher rates than low-crime areas.

South Dakota is an example of a rural state that has some of the cheapest car insurance rates in the country. The state’s minimum car insurance requirements are similar to other states so what makes South Dakota so inexpensive?

South Dakota Insurance Director Larry Deiter says low auto thefts and the rural nature of the state helps. Its residents also have some of the “highest average credit scores” in the country. In most states, car insurance companies can factor a person’s credit score when devising car insurance rates. Insurers believe a strong credit score means the person is a lower risk than someone with poor credit.

Deiter lists another possible reason.

“Much of the population tends to drive pickup trucks or SUVs, which have higher safety ratings,” he says.

Another state with low rates is North Carolina. We found that North Carolina has the lowest rates for 20-year-old drivers.

Teen and young adult drivers often pay the highest car insurance rates. Insurers view young drivers as risky because they are inexperienced and may take more risks than a middle-aged driver.

The North Carolina Department of Insurance tells CarInsurance.com that one reason for the low car insurance rates for 20-year-olds is that insurers in the state only have a high-rate period for three years from ages 16-18. Other states stretch out that period for seven or eight years, which means higher rates for drivers well into their 20s. So, 20-year-old North Carolina drivers don’t get hit with the same high rates as other states.

The low rates may be coming to an end in North Carolina. The North Carolina Rate Bureau requested a 13.8 percent average increase after not raising rates since 2009. If that’s approved, car insurance rates will increase for all drivers, including 20-year-olds.

So, which states have the cheapest car insurance? We drilled down by age group to show how states fare in each age group.

State averages are based on rates for nearly every ZIP code in each state for each age group for three coverage levels.

Cheapest car insurance for 20-year-olds by state

As mentioned above, North Carolina is the cheapest car insurance for drivers age 20. It wasn’t even close.

Here are average rates for drivers age 20:

GO TO CARINSURANCE.COM TO SEE THE CHART.

Cheapest car insurance for 30-year-olds by state

The cheapest car insurance for 30-year-olds is the largely rural state of Idaho. Fewer cities and metropolitan areas often mean lower rates for a state. Why? Because cities usually have more auto thefts and break-ins than small towns and villages.

Here are average rates for drivers age 30:

GO TO CARINSURANCE.COM TO SEE THE CHART.

Plus, adding a teen driver to your insurance policy can cost in the thousands. Before adding your teen to your policy, it’s a good idea to request rates for car insurance companies to see who charges the least for teen drivers.

Here are average rates for drivers age 40:

GO TO CARINSURANCE.COM TO SEE THE CHART.

Cheapest car insurance for 50-year-olds by state

The home of Mount Rushmore and Wall Drug Store tops the list for 50-year-olds with Idaho and Iowa a close second and third.

Here are the average rates for drivers age 50:

GO TO CARINSURANCE.COM TO SEE THE CHART.

Cheapest car insurance for  60-year-olds by state

The same three states have the cheapest car insurance rates for 60-year-olds.

Here are average rates for drivers age 60:

GO TO CARINSURANCE.COM TO SEE THE CHART.

Cheapest car insurance for 70-year-old by state

South Dakota tops the list again but is joined by the one and only Northeast state (Maine) to make the list. Maine has the oldest population with a median age of 44 years old, which is nearly seven years older than the national average. Those older Mainers are enjoying low car insurance rates.

Here are the average car insurance rates for 70-year-olds:

GO TO CARINSURANCE.COM TO SEE THE CHART.

How age affects car insurance rates

Young drivers pay the highest car insurance rates because of their inexperience and greater risk of getting into accidents.

Car insurance companies want to reduce the number of claims paid out, so those in age groups that are considered the riskiest have to pay the highest rates.

As you spend more time behind the wheel, your rates will likely go down unless you file multiple claims. Once drivers get into their 30s and 40s, they should see their car insurance premiums drop.

Plus, as you age, you are eligible for auto insurance discounts that bring down rates. Car insurance discounts include bundling your home and car insurance, good driver, and loyalty when you stay with the same insurer for a long time.

Now, here’s the bad news — your rates will likely begin to increase again once you hit your senior years. Elderly drivers are considered riskier than middle-aged drivers. Older people’s reaction times may slow, which can lead to accidents. That means higher car insurance rates for the older age groups.

Shopping for car insurance

No matter your location or age, it pays to shop around for car insurance. Insurers price the same policies differently based on their respective formulas. Each insurance company has a different algorithm that weighs risk factors. That’s why costs vary and it’s important to do a car insurance comparison before you buy.

For instance, one insurance company may charge a lot more if you get speeding tickets, while another may not raise rates that much. Another example is one insurer may charge higher rates for young drivers or motorists who live in cities, while another might give you a break.

It’s a smart idea to get car insurance quotes from at least three car insurance companies every couple of years. Provide multiple insurers with the same request, including coverage levels, and let them compete against one another. Make sure you take everything into account, including loyalty discounts or new customer discounts, when making the decision as to the right car insurance company for you.