New Jersey – Insure.com’s annual rankings of the most and least expensive states for auto insurance found Maine remains the cheapest state in the union for the second year in a row with an average annual policy price of  $807.

Michigan also holds on to its title of the most expensive state for the third consecutive year, with an average rate annual premium of $2,738 – more than double the national average of $1,325.

Top five least expensive states to insure for 2016

Sign Up for E-News

  1. Maine
  2. Ohio
  3. Wisconsin
  4. Idaho
  5. New Hampshire

The top three are least-expensive group regulars. Maine, Ohio and Wisconsin have all been in the top five multiple times since the report began in 2010.

“Most of the least expensive states don’t have as large metropolitan areas as the most expensive group. With less congestion comes fewer accidents and less risk for insurers. It’s one of the most straight-forward aspects lowering car insurance premiums in those states,” says Penny Gusner, consumer analyst for Insure.com. “Ohio has an extremely competitive insurance industry. There are more than 650 issuers competing for business within the state.”

Top five most expensive states to insure for 2016

  1. Michigan
  2. Montana
  3. New Jersey
  4. Louisiana
  5. Oklahoma

There are a few reasons that New Jersey landed in the top five most expensive states to insure list.    New Jersey is densely populated and with congestion comes accidents and claims.  When car insurance companies see more claims, they equate it to more risk and raise rates in that area.  Another factor in the high rates is high medical costs.

With a standard New Jersey auto insurance policy, the minimum personal injury protection (PIP) limit is $15,000,  but it can be raised to as high as $250,000 – the second highest in the nation (only behind Michigan with its unlimited coverage).  

" I’ve read that about 70 percent of drivers carry this maximum PIP benefit, which means that insurers could be out a lot when motorists make claims," explained PennyGusner, Consumer Analyst for Insure.  "And, unfortunately, hand-in-hand with no-fault PIP claims is fraud, there are always those that try to work the system.
Also, in New Jersey motorists can choose between the limited right to sue or unlimited right to sue.  If they choose the unlimited right, they retain the ability to sue the at-fault party for pain and suffering over any injury.  And, today people tend to be pretty litigious".

"To keep rates down motorists can do a few things," continued Gusner. "One is to try to keep a record clean of violation, accidents or claims.  You are less of a risk to an auto insurer this way, so keeps rates cheaper – and will even get you discounts with many car insurance companies.  Another way is to shop around. Insurance companies’ rates vary because they weigh risk factors differently and hand out different discounts. By shopping around, you can find the insurer who offers the best premium for your personal situation".

Gusner reminds consumers looking for a new car should keep in mind the cost of insurance. She emphasizes that the car you drive does make a difference.  Consumers can compare car insurance rates for up to 10 cars (2016 year model) on our easy to use tool here - http://www.insure.com/car-insurance/car-insurance-comparison/results, where you can view nationwide average rate, or state-specific average rates.