A recent ranking of states in order of car insurance affordability puts Massachusetts at the top of the list, according to press release “InsWeb Releases 2010 Car Insurance Affordability Index.” They compare car insurance rates in each state with the median household income in the state to get their affordability factor. The lower the affordability factor, the less households pay for car insurance based on their budget. Massachusetts’ affordability factor was the lowest at 1.84%, making them the most affordable state. The rest of the top ten in order are New Hampshire, Vermont, Minnesota, Utah, Nebraska, Hawaii, Indiana, North Carolina and Virginia.
With an affordability factor of 6.93%, a full two percentage points higher than any other state, Louisiana is the least affordable state in which to insure a car. Companies like Infinity auto insurance have to charge more based on the risk factors in that state, but residents’ median income does not balance with the insurance costs. The other nine least affordable states are Oklahoma, Missouri, Washington D.C., New York, West Virginia, New Mexico, Kentucky, Arizona and Florida. Many surveys rank where Americans pay the most and least for car insurance, but they don’t take into account how affordable the insurance is relative to median income. By determining what percentage of a family’s income goes towards car insurance, we get a better overall picture.
