5 Best States for Auto Insurance Buyers


Most people think that the more you pay for insurance, the better you will be protected, and that the service you receive will be better. Unfortunately, the facts don't support this belief. In fact, when it comes to collecting an auto insurance claim, where you live can be a bigger factor than what you pay for your insurance. This is the second, and final, post in a two part series demonstrating that auto insurance owners that pay a high price for their insurance do not necessarily get better protection than consumers buying low-priced insurance.

Best States for Auto Insurance Owners

To demonstrate the lack of an association between price and protection, ValChoice set out to identify the five best states for getting a good value from the dollars spent by auto insurance buyers. The analysis was based on two important factors: 1) The average annual cost of auto insurance, and 2) the amount of unpaid auto insurance claims outstanding in the state. The results of the analysis were that the following five states had the best combination of low price and good protection:

  1. Iowa: Lowest (best) level of unpaid claims, 3rd best price
  2. Idaho: 6th lowest in unpaid claims, best price
  3. North Dakota: 2nd lowest in unpaid claims, 4th best price
  4. South Dakota: 7th lowest in unpaid claims, 2nd best price
  5. Kansas: 3rd lowest in unpaid claims, 10th best price

What Auto Insurance Owners Need to Know

Demonstrating that good protection is not directly related to the price paid, all five of the states with the lowest amount of unsettled auto insurance claims, on a per policy basis, are also among the least-expensive states for buying auto insurance.

Part one of this series concluded that the highest priced states for auto insurance also had the highest levels of unpaid claims. Now knowing that the lowest priced states for auto insurance are the states with the lowest levels of unpaid claims, the take away from this analysis is that for auto insurance owners, price is not a good measure of the quality of the insurance purchased. It goes without saying that advertisements are the worst way of deciding where to buy insurance. Instead, analysis of which companies provide the best value is the only option to ensure you get insurance with the price, protection and service you expect and deserve. Companies like ValChoice provide this type of analysis for consumers.

The calculations to identify the five best states for auto insurance owners were done as follows: The total unpaid claims[i], per state, divided by the number of auto insurance policies[ii] in force in the state. This amount was then added to the average price of auto insurance in that state[ii]. The result is the average annual cost to insure an auto, with the per policy, outstanding, unpaid claims amount added to the average cost.

[i] © AM Best Company, Used by Permission

[ii] Insurance Information Institute, iii.org