The Five Most Expensive U.S. Cities for Car Insurance

By: Kyle Magin March 8, 2018
Detroit is the most expensive city in the country to insure your car in, due to everything from the state's no-fault insurance laws to poor road conditions.
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Like the price of gas, housing, and food, the price of car insurance can fluctuate wildly depending on where you live. A North Carolinian enjoying the state’s mild winter climate and well-paved roads may cut a $72 monthly premium check for auto coverage. A Michigander, on the other hand, may have to snow-shovel their way out to the mailbox to send a monthly premium check for $217.50 to ensure coverage for their car on the state’s pothole-pocked streets and highways.

As in many things, the study of car insurance is a study of contrasts.

In February, The Zebra, an Austin, Texas-based automotive insurance comparison site, released its annual study of the U.S. car insurance market, The State of Auto Insurance.

The report unveiled another climb in auto insurance rates nationwide from 2016 to 2017, with Americans paying about 2% more for coverage, owing an average of $1,427 in annual insurance costs. Michigan drivers paid, on average, $2,610 annually, while North Carolinians paid $865. The massive gulf between the numbers is due to all sort of factors, including weather, fraud, and state insurance requirements.

Below, we’ll take a closer look at the five most expensive cities for car insurance, and the reasons behind their costly coverage rates.

Detroit, Michigan

Claiming the number one spot for cities with the most expensive auto insurance is Motown, the home of the American auto industry: Detroit, Michigan. Your average Detroiter pays $5,414 annually in car insurance premiums, or about $451 monthly.

But why are residents of one of America’s most cash-strapped cities on the hook for such massive bills? Many point to the state’s no-fault (personal injury) insurance mandate. Simply put, Michiganders live in one of 18 states where no-fault insurance is required. The coverage provides unlimited personal injury compensation to people involved in car accidents for the remainder of their life, regardless of who’s at fault in the crash. Michigan’s legislature has tried to adjust the system multiple times, most recently last fall, but all efforts have failed.

The high cost of coverage has left many Detroiters with no option but to drive illegally without insurance, said Leslie Love (D-Detroit), a Michigan state representative.

“Preserving a system that is not attainable for nearly half the motorists in the city of Detroit does no justice for poor and middle-class folks,” she told the Detroit News.

New Orleans, Louisiana

NoLastreet
New Orleans' auto insurance prices are anything but easy on the wallet.

The Big Easy takes the number two spot on The Zebra’s list, and you’ll pay a king’s (cake) ransom to drive in New Orleans where the average car insurance premium is $3,433 annually. The expensive cost of coverage can be attributed to the city’s vulnerability to hurricanes and other foul weather, as well as an unfortunately high instance of crime. State officials also place blame on uninsured and under-insured motorists, making up 14% and 40% of the state’s drivers, respectively.

Even more, those lacking proper coverage push claimants to court if their needs aren’t met by insurance companies. Insurance provider Louisiana Farm Bureau belongs to a six-state network of insurers and writes 17% of its policies in Louisiana, and yet 50% of all its lawsuits stem from the Bayou State.

Hialeah & Miami, Florida

MiamiStorm
South Florida's penchant for hurricanes accelerates high-cost insurance for Miami and neighboring Hialeah.

Hialeah, a western Miami suburb, and Miami come in at number 3 and 4, respectively, on The Zebra’s list of cities with the costliest car insurance. Annual premiums cost $2,709, and $2,651, respectively, in the two South Florida cities. Reasons for the prices are again, manifold: the Sunshine State compels its residents to buy no-fault insurance, and the region is prone to natural disasters and flooding from hurricanes. To top it all off, an increasing number of Floridians are crashing into one another.

“High density development is putting more cars on roads, increasing likelihood of accidents,” said Lynne McChristian, Florida representative for the Insurance Information Institute, a trade group for the industry.

The number of vehicle crashes in the tri-county area of Miami-Dade, Broward, and Palm Beach counties, which include both Hialeah and Miami, rose by 12% from 2014 to 2016, and fatalities rose 27% over that same stretch. Some officials point to lower gas prices, which puts more drivers on the road, and smartphones, which take their eyes off of it.

Baton Rouge, Louisiana

BatonRougeroad
Baton Rouge lies notoriously low along the Mississippi River, making it prone to flood-damaged cars.

Baton Rouge—or, “Red Stick,” en français—earns its scarlet letter in the fifth spot with a $2,639 average annual premium. It derives its astronomical car insurance costs—nearly twice the national average—for many of the same reasons as New Orleans. A 2016 flood in the city totaled 65,000 vehicles, which cost insurance companies a whopping $700 million. Like the other cities on this list, if car insurance costs are a deal breaker for you, bid Louisiana’s state capital au revoir in your next search for a new hometown.

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