Motor city tag doesn’t bring cheap premiums

Where are the most and least expensive cities for car insurance?

Insurance News

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A recent study revealed the average premiums in the largest 25 metropolitan areas within the US, and although living in these places may bring higher rates, the statistics showed considerable variation between cities. 

An August 2014 Quadrant Information Services study, commissioned by insuranceQutoes.com, found Detroit metro drivers pay a staggering 165% more than the national average for car insurance, while Charlotte area residents pay the lowest, with premiums 43% less than the national average. 

“Even though Charlotte is a big town they’ve got some pretty interesting state regulation in North Carolina,” explained Laura Adams, insuranceQuotes.com expert. “Insurance is regulated at the state level, not the federal level. For North Carolina they are a highly regulated state, so that means it’s very difficult for an insurance company to raise rates.” 

She continued, “I think that the laws in Michigan, the no fault regulation and the fact that they have unlimited medical coverage, that’s what is making rates so expensive in the entire state, and also in Detroit.” 

“I think part of the uninsured issue is the fact that insurance is so expensive. I have a feeling many people just can’t afford it, so they take the chance of driving without insurance and that just drives rates up further. I don’t know if agents specifically can make a difference. I think until the rules and regulations are changed statewide, we’re not likely to see much change in Michigan.” 

The top 5 most expensive cities were rounded out by New York (36% more than national average), Miami (34%), Los Angeles (25%) and Atlanta (17%). While the bottom five included Cleveland (-31%), Pittsburgh (-24%), St. Louis (-18%) and Chicago (-16%).

Amid these reports agents and brokers will more than likely be asked by their clients, ‘How do I save money? How do I get around the high rates in these areas?’ Subsequently, an effective solution could be found in a pay-as-you-drive alternative. 

“That is certainly one of the most effective ways to cut your costs in most cases,” said Adams.  

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