Massachusetts, often rapped as a costly state for drivers, is actually the most affordable state for auto insurance while Louisiana is the least affordable, according to one insurance provider’s research that considers how much of a family’s income goes to pay for car insurance.
InsWeb, an online insurance comparison provider, recently released its 2010 Car Insurance Affordability Index — a list of the most and least affordable states in which to insure a vehicle.
To develop the list, InsWeb said it ranked all 50 states and Washington D.C. according to affordability factor. A state’s affordability factor is determined by dividing its median household car insurance rate by its median household income. The lower the factor, the less a typical family in that state tends to spend on car insurance relative to its budget, says InsWeb.
The 10 most affordable states are:
State Affordability Factor
1. Massachusetts 1.84%
2. New Hampshire 2.23%
3. Vermont 2.39%
4. Minnesota 2.39%
5. Utah 2.43%
6. Nebraska 2.43%
7. Hawaii 2.44%
8. Indiana 2.45%
9. North Carolina 2.52%
10. Virginia 2.53%
The 10 least affordable states include:
State Affordability Factor
1. Louisiana 6.93%
2. Oklahoma 4.94%
3. Missouri 4.86%
4. Washington D.C. 4.77%
5. New York 4.54%
6. West Virginia 4.51%
7. New Mexico 4.37%
8. Kentucky 4.27%
9. Arizona 4.14%
10. Florida 4.10%
“Comparing median car insurance rates by state gives us a good sense of where drivers are paying higher and lower premiums, but it doesn’t necessarily tell us where states rank in terms of affordability,” said Brad Cooper, senior vice president of product, site and marketing at InsWeb. “To really get a sense of where car insurance is the most and least affordable, you have to consider how much of a typical family’s income goes towards premiums, and that’s what our affordability factor measures.”
Source: InsWeb.com
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