IRC releases the state Auto insurance Affordability Rankings



The Insurance Research Council (IRC) has determined that Michigan, Florida, and Louisiana are the states with the most expensive personal auto insurance, according to IRC research.

According to IRC, the three most cheap states are North Dakota, New Hampshire, and Hawaii.

Insurance spending as a percentage of median household income serves as the basis for IRC’s state-by-state affordability rankings, such as those produced by Triple-I, a partner organization of the Institutes.

The National Association of Insurance Commissioners provided the data for this analysis, which only includes data for 2019 and ignores more recent events like the pandemic, the inflationary impact of supply-chain interruptions, and the conflict in Ukraine.


Before these occurrences, auto insurance was less expensive in the US.


Premiums throughout the 1990s were based on a percentage of the average household income.

By the 2010s, it had decreased to 1.6%, and as of 2019, it was still at 1.56 percent.


The median household income rose by 2.9 percent annually over the 30-year span.

A state’s affordability varies substantially.

Hawaii has the lowest cost-of-living ratio at 0.95 percent.

Louisiana is the least affordable state, with an average expenditure-to-income ratio that is 3.01 percent, more than three times greater than the national average.


The research states that initiatives to reduce these costs must concentrate on important cost drivers such as accident frequency, repair costs, and injury claim relative frequency.

The seriousness of the injury claim is also crucial.

Key cost factors include things like medical use, attorney participation, claim abuse, uninsured drivers, and litigation climate.

Going forward


In the event of a pandemic or post-pandemic, the riskiness of U.S. highways may have an impact on future affordability patterns.

After decades of reduction, traffic deaths in the United States have begun increasing.

This is because people are driving faster, more recklessly, and without seat belts while pandemics are present.

Nearly 43,000 traffic fatalities occurred in the United States in 2021, a 16-year high.


Traffic fatalities increased when “daily life was interrupted in March 2020,” according to Steven Cliff, administrator of the National Highway Traffic Safety Administration.

These developments aren’t restricted to 2020 as we had thought.

According to the NHTSA, 9,560 persons will die in car accidents in 2022.

This represents a 7% increase over the same period in 2021.

Since 2002, it was the deadliest quarter.


The IRC analysis highlights how attorney participation can increase insurance costs and, ultimately, policyholder premiums in states with low levels of vehicle coverage.

Given that attorneys are more frequently involved in lawsuits involving bodily injury, the NHTSA figures might help you comprehend the anticipated increasing effect on premiums.

As insurers work to retain enough surplus to be able to fulfill their obligations, all of these factors together lead to an increase in the frequency and severity of claims as well as higher premiums.