Ouch! South Dakota Among 15 States With the Highest Insurance Premiums

Car insurance is mandatory in nearly every state. However, the amount of money Americans shell out for their insurance plan varies drastically according to where they live.

Unfortunately for South Dakota residents, that adds up to a pretty penny.

Staff at Insure.com studied Quadrant Information Services data to determine where Americans pay the most money for their car insurance.

They used a Honda Accord LX that has 10,000 annual miles as their standardized vehicle. As for the driver, they studied rates based on a 40-year-old American with a good insurance score and no traffic violations on record.

After analyzing over 51 million records, 167 insurance companies, and 34,588 ZIP codes, these are the most expensive states for car insurance.

1: Louisiana

Louisiana is home to the most expensive car insurance in the country, with an average yearly rate of $2,883 for a 40-year-old driving a Honda Accord LX.

Although the Bayou State has a history of high car insurance, residents experienced a 14% increase between 2021 and 2023 alone, paying an average of $348 more in 2023 than in 2022.

2: Florida

The Sunshine State is the second-worst state in the U.S. for high car insurance. Forty-year-olds driving a Honda Accord LX pay an average of $2,694 per year for their insurance.

Unfortunately, 2024 isn’t looking promising for Floridians on the insurance front. Residents are paying an average of 24% more for insurance this year than last year.

Some of the reasons for Florida’s high insurance costs include extreme weather and more severe accidents.

3: California

Californians pay a pretty penny to drive a vehicle, with annual premiums averaging $2,416 for a 40-year-old Honda Accord LX-driving male. That’s a $306 increase between 2022 and 2023 rates.

According to insurance expert Karl Susman, accident claims in California have significantly risen in California.

Part of the reason for this is that modern cars have technology that’s expensive to repair, and auto insurance companies are making up for it by increasing premiums.

4: Colorado

Coloradans can’t be thrilled to live in the fourth-most expensive state for car insurance, with rates averaging $2,337. But it’s the 29% increase in premiums between 2021 and 2023 that’s hurting many Coloradan households.

One of the reasons Colorado’s insurance premiums increased so much is that the Centennial State has the worst auto theft rate in the United States.

Drivers with comprehensive auto insurance coverage are compensated for damages from auto theft attempts and successful theft, thus increasing rates for everyone when there are high incidences of auto theft coverage payouts.

5: South Dakota

An annual car insurance premium of $2,280 for a 40-year-old American driving a Honda Accord LX may sound relatively low compared to the first four states on this list. But South Dakotans aren’t celebrating; just one year prior, they were paying $1,553 for the same plane.

That’s a 47% increase. Ouch.

One of the reasons that insurance in South Dakota increased so much is that the number of accidents and claims is rising due to more people driving.

South Dakota healthcare is also getting more expensive, cutting into car insurance companies’ bottom line when they have to pay out claims on medical bills.

6: Michigan

Michigan’s average car insurance premium for a 40-year-old Honda Accord LX driver is $2,266. The Great Lake State’s residents experienced a relatively low 5% increase in insurance premiums between 2021 and 2023.

A major reason why Michigan’s auto insurance policies are so expensive is that they include unlimited lifetime coverage for catastrophic injuries.

In layperson’s terms, that means people who are the victims of life-changing crashes receive unlimited medical coverage for the entire duration of their lives.

7: Kentucky

Forty-year-old Kentuckians driving Honda Accord LXs paid an average of $2,228 for their auto insurance in 2023. That’s $359 more than in 2022.

All Kentucky resident drivers must have personal injury protection coverage, which increases the cost of a standard premium.

Other factors that cause Kentucky to have high premiums are a relatively high rate of car thefts.

8: Montana

It costs an average of $2,193 each year for 40-year-old Montana drivers to maintain auto insurance on a Honda Accord LX.

This is a painful number, given that in 2022, the cost was a relatively lower $1,751.

According to InsureOne, Montana has a relatively high rate of traffic fatalities. Nearly 20 people pass away from crashes per 100,000 residents.

9: Washington, DC

Washington, D.C., is a district, but Insure.com chose to include the nation’s capital on this list since residents pay significantly more money for auto insurance than residents in Maryland and Virginia.

Residents of Washington, D.C. who are 40 years old pay an average of $2,157 in auto insurance when owning a Honda Accord LX.

A high population density in Washington, D.C., is a “driving” factor for high auto insurance premiums. The more densely populated an area is, the higher the risk that busy streets can result in a collision.

10: Oklahoma

Oklahoma residents paid about 26% more in car insurance premiums in 2023 than they did in 2022. That amounted to an average annual premium of $2,138 for a 40-year-old driving a Honda Accord LX.

Contrary to Washington, D.C., Oklahoma’s population isn’t very dense. However, because things are so spread out in the Sooner State, many residents spend a lot of time on the road.

The more time one spends on the road, the greater the chance of an accident occurring.

11: Delaware

Delaware is a unicorn on this list, with insurance rates dropping by 3% between 2022 and 2023.

Whereas a 40-year-old Honda Accord LX driver paid an average of $2,135 on one year’s worth of auto insurance in 2022, the same person paid $2,063 in 2023.

Nevertheless, auto insurance costs in Delaware are above average. Delaware’s dense population plays a significant role, along with expensive repair prices.

12: Rhode Island

Forty-year-old Rhode Islanders driving Honda Accord LXs paid an average of $2,061 for their auto insurance in 2023.

That’s a 20% increase ($344) from 2022.

A dense urban population, as well as highway density, are among the reasons that Rhode Island residents have to shell out so much money to have an insurance plan.

13: Nevada

Nevada and Rhode Island are practically tied, with 40-year-old Honda Accord LX-driving Nevadans only paying an average of $1 less for annual auto insurance.

They didn’t have the sticker shock in 2023 as Rhode Islanders did, though; Nevada’s car insurance premiums only increased by about 4%.

According to WalletHub, parties in Las Vegas and relaxed alcohol laws are some of the reasons that auto insurance is so high in Nevada.

14: New Mexico

New Mexicans 40 years of age who drove Honda Accord LXs in 2022 paid $1,516 for their annual auto insurance in 2022.

Fast forward to 2023, and they paid an average of $2,049. That’s a massive 35% increase.

A high percentage of uninsured drivers on New Mexico’s roads is a contributing factor to expensive auto insurance premiums.

And given the relatively lax laws when drivers are caught driving without insurance, this won’t likely change soon.

15: Texas

Texas’ $2,043 annual auto insurance policy for a 40-year-old driving a Honda Accord LX seems relatively low, but it’s still much higher than the majority of states.

Texans experienced around a 14% increase in auto insurance premiums between 2022 and 2023.

Population density factors into insurance rates, so this is one of the reasons Texas’ insurance rates are high. Texas has three of the ten largest cities in America. It also has many relatively smaller cities with growing populations.

State With the Cheapest Insurance

Maine has the cheapest car insurance in the nation, with 40-year-olds owning Honda Accord LXs paying $1,175 in annual premiums in 2023. That’s a 7% increase ($75) from 2022.

The Pine Tree State has the lowest rate of uninsured drivers in the country, which helps keep car insurance premiums low. It also has a low population density.

Runners Up

New Hampshire, Vermont, Ohio, and Idaho come in second to fifth place, respectively, for low car insurance rates.

These states all have enough qualities that keep auto insurance premiums down.

Factors Impacting Car Insurance Premiums

Several factors within and outside of one’s control impact an individual’s auto insurance policy. Examples include:

• Driver’s age and gender
• Driving record
• Your vehicle
• Population density where you live
• Theft and vandalism rates where you live
• Rate of accidents where you live

National Increases

Americans don’t need to be in one of these 15 states with the highest auto insurance premiums to be suffering from car insurance costs.

As of December 2023, car insurance premiums had increased about 20% across the U.S. That’s the biggest annual increase our country has seen since 1976.

Driving Uninsured

It’s becoming increasingly common for Americans to forego purchasing car insurance even though doing so is illegal in most states.

The uninsured driver rate is particularly notable in South Dakota, where the rate more than doubled from 3.3% of uninsured drivers during the second half of 2022 to 6.8% by the first half of 2023.

Depending on the state, the consequences of being caught without auto insurance can involve fines and/or jail time. It also comes with financial risk, for a serious collision can cost uninsured drivers $10,000 or more.