10 Cheapest States for Car Insurance in 2024 (and How to Get the Best Deals)

Car insurance is a major expense for many drivers, but where you live can significantly impact your rates. Certain states offer much cheaper car insurance due to lower traffic density, fewer accidents, and favorable insurance regulations. Let’s dive into the 10 cheapest states for car insurance in 2024, how to get the best deal, and an alternative option: self-insurance.

10 Cheapest States for Car Insurance in 2024

While rates vary by provider and personal driving history, these states consistently rank as the most affordable for car insurance:

1. Maine: Low accident rates and affordable repair costs make Maine the cheapest state for car insurance.

2. Vermont: Fewer drivers and low accident rates result in low premiums.

3. Idaho: Rural roads and minimal traffic congestion keep insurance costs low.

4. Wyoming: Sparse populations and fewer road hazards mean cheaper rates.

5. Iowa: Low vehicle theft rates and a rural environment make car insurance budget-friendly.

6. Ohio: A competitive insurance market and low operational costs for providers keep premiums affordable.

7. Wisconsin: Low population density and moderate repair costs contribute to lower rates.

8. Indiana: A highly competitive insurance market keeps premiums low.

9. South Dakota: Low claims frequency ensures cheaper rates for drivers.

10. North Carolina: State-regulated insurance systems ensure reasonable premiums for residents.

What Is Self-Insurance for Cars?

Self-insurance is an alternative to purchasing traditional car insurance. Instead of paying premiums to an insurance company, you accept full financial responsibility for any damages, accidents, or injuries caused while driving. Typically, self-insurance requires you to provide proof of significant financial resources, such as a bond or cash deposit, to meet your state’s minimum coverage requirements.

This option is best suited for individuals or businesses with substantial assets who are confident in their ability to cover accident costs. It is often used by:

• Fleet owners: Businesses that own many vehicles, such as trucking or delivery companies.

• High-net-worth individuals: Those with the financial means to cover accidents out of pocket.

States That Allow Self-Insurance

Not every state permits self-insurance. Here are some states that allow this option, though requirements vary:

• California

• Texas

• Florida

• Ohio

• New York

• Illinois

• Pennsylvania

• Michigan

• Arizona

• Oregon

To qualify for self-insurance, most states require you to:

1. Apply through the Department of Motor Vehicles (DMV) or a similar agency.

2. Provide financial proof, such as a cash deposit or surety bond, that demonstrates your ability to cover liability claims. For more information on obtaining a surety bond check out this article.

3. Maintain compliance with state-specific requirements, which may include regular audits or proof of financial solvency.

Pros and Cons of Self-Insurance

Pros:

• No monthly premiums to an insurer.

• Flexibility to manage claims independently.

• Potential cost savings for businesses with a large fleet of vehicles.

Cons:

• High financial risk in the event of a costly accident.

• Requires significant upfront capital to meet state requirements.

• Administrative burden of managing claims and compliance.

How to Get the Best Deal on Traditional Car Insurance

If self-insurance isn’t an option for you, here are some proven strategies to reduce your car insurance costs:

1. Shop Around and Compare Rates

• Use online comparison tools to explore multiple quotes.

• Compare at least three providers to find the best deal.

2. Bundle Your Policies

• Combine car insurance with homeowners or renters insurance to receive a multi-policy discount.

3. Maintain a Clean Driving Record

• Avoid accidents and traffic violations, which can increase your rates.

4. Increase Your Deductible

• Opt for a higher deductible to lower your premiums, but ensure you can afford the deductible in case of a claim.

5. Ask About Discounts

• Look for discounts based on safe driving, low mileage, or vehicle safety features.

6. Improve Your Credit Score

• A good credit score can lead to lower insurance premiums in many states.

7. Join a Telematics Program

• Many insurers offer programs that monitor your driving habits and reward safe driving with discounts.

8. Reassess Your Policy Regularly

• Review your policy annually to ensure you’re still getting the best rate.

Final Thoughts

Car insurance doesn’t have to be a financial burden. Whether you live in one of the cheapest states like Maine or are considering alternative options like self-insurance, there are ways to minimize your costs. By shopping smart, maintaining a clean driving record, and exploring all your options, you can secure the best coverage for your needs.

Want to learn more? Check out our Car Insurance Savings Guide for additional tips and insights!