car insurance

Insurance rates are on their way up – and some states' premiums are rising faster than others. According to a study released today by online insurance resource Insure.com, average annual insurance rates are up $131.74 over last year, with Michigan and Louisiana leading the way among the most expensive states to insure a car.

The study, which looked at insurance rates for a typical 40-year-old male across six major carriers, found that the average annual premium is $1,561 nationally. But in Michigan, the average premium rises to $2,541 – nearly $1,000 above the national average. The huge spike also affects motorists in Louisiana, who pay $2,453 on average, and Oklahoma, where the average yearly premium runs just under $2,200. So why are some states so much higher than others?

In Michigan, it's all due to legislation. The Great Lakes State is the only one in America that guarantees unlimited personal injury protection to anyone injured in a car accident, leading to major costs to Michigan drivers. Worse, motorcycles aren't considered motor vehicles in Michigan, meaning they don't need car insurance, driving up rates. And because of these and other factors inflating rates, many Michigan drivers illegally forego insurance, leading to even higher premiums.

In Louisiana, the higher rates are more likely due to threats of litigation, with elected judges deciding cases involving most claims and personal injury attorneys frequently advertising on television to get money for accident victims. Meanwhile, high rates in Oklahoma are almost certainly due to a huge number of uninsured motorists. A 2007 study found that 24 percent of Oklahoma drivers are operating vehicles uninsured, placing the state fourth in the nation.

So is there a safe haven from raising insurance rates? Try Vermont and South Carolina. Vermont's average annual premium is just $995 – nearly $600 below the national average – while South Carolina's comes in at just $1,095. Reasons for the low cost in those states include less litigation, which decreases risk to carriers, and fewer regulations, which increases competition among them.

Despite some bargain states, insurance rates are generally on the rise. According to Insure.com, the main culprit is uninsured motorists – but other causes can include the weather, court systems, or types of vehicles purchased.

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Jeffrey Archer is fortunate to have turned a passion for cars into a career. His wide-ranging automotive experience includes work for automakers and dealers in addition to covering the news. When not writing, he spends his time searching for unique cars on AutoTrader.com.

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