If you just migrated to a new state in the US, you may be wondering why rates vary from one state to another. You should know that there is a good reason for this. Each county determines its own rules regarding car insurance and it's each citizen's responsibility to know the difference.
Each state has minimum requirements. Some require a lower minimum compared to others. Usually, those that have higher cost of living offer higher minimums. The minimum rates are also higher in those places that are more prone to accidents and are more populated compared to other counties.
You need to know exactly the minimum requirements being implemented in your state before you avail of car insurance. Because the requirements differ from one from another, you'll find that the same insurance company may offer different rates in different county. Therefore, a certain insurance company may be the lowest in one state. May not be the same in another. Once you've moved to a different place, shop around and never assume that your previous car insurance company will still offer the lowest rate in your current location. it's advised that you always compare rates of different insurance companies once you move to a new location.
The insurance industry in each state is monitored by a "department of insurance". Their liability is to make sure that all insurance companies follow ethical businesses. it's best to shop around locally rather than shop online for national providers. This way, you're sure that the insurance company is legal, licensed and in compliance with state laws.
The laws in the state play a big role in determining the promotions for individual insurers. It goes without saying that the foundation of car insurance policies is based on the minimum coverage amount that the law of the state requires. The rule of thumb is that states require coverage for bodily injuries caused by the driver and his passengers as well as any damage to property involved. Although not all, many states also require individuals to avail of insurance for uninsured or underinsured drivers.
The fact that each state requires different minimum amounts of coverage means that the base rate of insurance policies will vary from one to another. For instance, the base rate for states that require higher minimums such as Maine and Alaska will be higher than those in other states. Other states also have regulations regarding classification of licenses, age restrictions and other factors.
The cost of insurance in Midwestern states is relatively lower than other states because they've lower population. Although this may not make a lot of sense to many people, it's actually very logical. When a state has less population, it's less due to accidents because the streets are less crowded. The denser the population of the state, like New Jersey or California, the more likely are people to encounter car-related accidents.