Drivers In These 5 States Pay The Lowest Car Insurance Rates

To legally drive, you need proper registration and a valid insurance policy. Navigating the many options available can be both tricky and frustrating. According to data compiled by the U.S. News & World Report, the average annual cost of car insurance in the U.S. is $2,012, or $168 per month. Still, price is just one factor — coverage, reliability, service, claims handling, and car safety features all matter.

However, for many drivers out there, going for the cheapest car insurance companies is always going to be a top priority. Fortunately, across the U.S., some states offer lower-than-average rates. While contracts vary depending on personal factors like driving history, age, credit score, gender, and car insurance history, national data shows that drivers in certain states pay significantly less for comparable coverage.

These states benefit from lower insurance costs mainly because of lower people density, fewer claims from crime and accidents, reduced insurer risk tied to weather, and fewer uninsured drivers. In this guide, we'll highlight the five states where insurance tends to be cheapest, explain why their rates are lower than the national average, and what that could mean for your bank account.

According to Forbes's 2025 "Car Insurance Rates by State" analysis (Forbes), the Green Mountain state of Vermont appears to be the one where drivers pay the lowest average auto insurance premiums. More specifically, the average annual premium of about $1,237 for full coverage and $103 for monthly rates is ranked as the cheapest. Insurance.com, a specialist site for auto insurance rates and comparisons, also notes Vermont as the cheapest U.S. state, with full coverage at $1,504 annually, or $125 per month.

Therefore, Vermont drivers pay between 25% and 40% less compared to national averages. The reason why Vermont tops the list is dependent on many things. For starters, Vermont is not all that densely populated, and its overall crime rates are low. These numbers are also affected by fewer average claims and lower overall repair costs. It's also important to mention that folks from Vermont are not the fastest drivers in all of America, but rather quite the opposite, as Vermonters are actually some of the more restrained drivers.

New Hampshire (NH) is also one of the cheapest U.S. states when it comes to insurance, but its specific ranking varies by source. Insurance places it as the second cheapest at $1,650 for full coverage with a monthly insurance rate of $137. Forbes, while using different datasets, ranks NH as the sixth cheapest state in terms of insurance, with $1,480 average annual costs but an average monthly cost of $123. Given the fact that the previously mentioned national average is $167, NH drivers pay roughly 18% to 26% less than average.

One fairly specific thing about NH state law is that it actually does not require you to even have valid car insurance to drive, but only proof you have sufficient funds to cover damages if an accident were to occur. Strangely, it is also one U.S. state that has no laws requiring adults to wear seatbelts. Either way, the reasoning behind such low monthly rates also includes a fairly thinned-down population, a general lack of minimum coverage, and less frequent severe weather.

The third state on our list is Maine. Forbes reports an annual insurance coverage cost of $1,408 which translates into $117 for a monthly insurance rate. On the other hand, Insurance is once again a bit more conservative with an annual insurance cost of $1,701, or $142 per month. Regardless, these numbers put Maine at around 15% to 30% less compared to the national average of $2,012.

Overall, the reason behind these numbers has a lot to do with Maine being the most rural state in the U.S. Moreover, it is also one of the states with the lowest crime rates. Although U.S. Highway 1, one of the most dangerous highways in the U.S., does pass through Maine, less than 14% of the annual U.S.1 fatalities actually occur in Maine. Lastly, according to the Insurance Information Institute, only 5.7% of Maine drivers drive uninsured — the lowest amount in the entire country, and that also affects insurance rates.

Ohio is also rated within the top five of U.S. states with the lowest car insurance rates. Forbes reports Ohio annual car insurance coverage at $1,422 ($120 per month) while Insurance puts it at $1,739 ($145 per month). On the whole, this puts Ohio drivers needing to pay about 14 to 30% less compared to the national average. Ohio enjoys lower overall car insurance rates because it has many insurance providers, and thus the market is saturated and very competitive.

Moreover, Ohio also has a lower car accident rate compared to other states, while the costs of living aren't exaggerated as in many other states. Ohio also benefits from fewer uninsured drivers and many rural areas. Insurify's data shows Ohio has one of the lowest weather‑related financial risk profiles in the U.S. This translates to $63 per person in expected losses, with insurers rating every county as moderate or low risk. Still, the cost of owning a car in Ohio is about to get more expensive due to a pricier car registration fee.

The last state on this list is Idaho. Although it isn't mentioned by Insurance, Forbes places Idaho as the second least expensive state in the U.S. thanks an average annual car insurance cost of $1,339, or $112 per month. Bankrate also lists Idaho as one of the cheapest U.S. states for car insurance, with an average annual full-coverage premium of about $1,476 ($123 per month). Compared to the national average of $2,012, this means that drivers from Idaho pay between 26% and 34% less.

Idaho is also one of the three states in the U.S. in which it is illegal to drive with a broken windshield. Moreover, according to Allstate's 2025 America's Best Drivers Report, Boise, Idaho, ranks as the second safest city to drive in the U.S. These numbers are based on data from the company's auto insurance claims between 2022 and 2023, thus drivers from Boise are expected to pay even less — $1,354 ($112 per month). Pair that with a low number of uninsured drivers, mild weather conditions, low insurance fraud rates, fewer vehicle thefts, and balanced driver demographics, making Idaho a low-risk state for insurers.