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Michigan Leads as the Most Expensive State for Car Insurance

Source: CBC Money Watch

Posted on 31 Jul 2012 by Neilson

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Car InsuranceWhether driving a 1967 Pontiac or a brand-new Porsche, car owners in Michigan drivers pay a higher percentage of their income for auto insurance than any other drivers in the nation.

That's because Michigan law requires that every auto insurance policy provides unlimited personal injury protection, says John Egan of So if you get in an accident and are injured, the auto insurer may have to pay for your physical therapy for the rest of your life. As a result, the average Michigan driver spends 8 percent of his or her income on auto insurance each year.

On the other end of the spectrum, residents of Massachusetts devote the smallest chunk of their income to buying car insurance, although Egan notes that's largely because median income is higher there. North Carolina residents pay the second-smallest percentage of income for auto insurance, with the state far more representative of the national median, according to a CarInsuranceQuotes survey. Editors for the website attribute the relatively low cost of insurance in North Carolina to the fact that the state is more rural than most and to its court system discouraging auto accident claims, which can drive up the cost of coverage.

Here is a list of the top 10 states in terms of where drivers pay the most and least for auto insurance as a percentage of their income.

Most expensive states for auto insurance:

1. Michigan: 8 percent

2. Louisiana: 5 percent

3. Kentucky: 4.5 percent

4. West Virginia: 4.3 percent

5. Mississippi: 4 percent

6. Arkansas: 3.7 percent

7. Delaware: 3.6 percent

8. New York: 3.5 percent

9. Nevada: 3.4 percent

10. Florida: 3.3 percent

Least expensive states for auto insurance:

1. Massachusetts: 1.4 percent

2. North Carolina: 1.6 percent

3. Hawaii: 1.6 percent

4. Alaska: 1.7 percent

5. Oregon: 1.95 percent

6. Iowa: 1.97 percent

7. New Hampshire: 1.98 percen

8. California: 1.991 percent

9. Virginia: 1.992 percent

10. Maine: 1.993 percent