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Over 40s car insurance

En Español: Las tarifas de seguro automotor por estado

Michigan comes out on top for the third year in a row in a contest that no state wants to win: the most expensive car insurance rates in the nation. Insure.com’s 2016 state-by-state comparison of auto insurance premiums found that the Great Lakes State is still the most expensive state in the country to insure a car.

Rank State Premium
National average $1325
1 Michigan $2738
2 Montana $2297
3 New Jersey $1905
4 Louisiana $1842
5 Oklahoma $1778
6 DC $1773
7 California $1752
8 Florida $1654
9 Maryland $1610
10 Rhode Island $1608
11 Delaware $1607
12 Georgia $1559
13 Texas $1510
14 West Virginia $1456
15 Wyoming $1421
16 Colorado $1393
17 Connecticut $1367
18 South Carolina $1353
19 Arkansas $1345
20 Alabama $1337
21 Massachusetts $1325
22 Pennsylvania $1305
23 Kentucky $1295
24 New Mexico $1277
25 Mississippi $1277
26 Oregon $1267
27 Minnesota $1257
28 Nevada $1221
29 North Dakota $1200
30 Nebraska $1188
31 Arizona $1188
32 South Dakota $1168
33 Washington $1168
34 Tennessee $1145
35 Kansas $1135
36 Indiana $1113
37 Alaska $1078
38 Utah $1061
39 Missouri $1056
40 New York $1050
41 Hawaii $1049
42 Illinois $1035
43 Virginia $1020
44 Iowa $989
45 North Carolina $987
46 Vermont $942
47 New Hampshire $941
48 Idaho $935
49 Wisconsin $912
50 Ohio $900
51 Maine $808

Michigan has been in the No. 1 or No. 2 spot for the six years that Insure.com has commissioned the annual report. Montana captured the No. 2 spot for the second year in a row. New Jersey broke into the top five for the first time ever, Louisiana was No. 4, and Oklahoma rounded out the top five.

On the flipside of the cost coin, Maine grabbed the No. 1 spot for the cheapest car insurance in the country. Maine has been in the top three for the least expensive car insurance for all six years of the study. This year, Ohio came in No. 2, Wisconsin was three, Idaho took fourth, and New Hampshire earned No. 5.

Use the interactive map below and hover over any state to display the average annual rate, comparison to national average, and the percent of change from last year.

This year’s best-selling vehicles

The annual study compiles rates from six large insurance carriers in 10 ZIP codes in every state. Rates were for the same full-coverage policy for the same driver -- a 40-year-old man with a clean driving record and good credit.

The rates are an average for the 20 best-selling vehicles in the U.S. in order to present more accurate rates for the average driver – without high-end sports or luxury cars skewing the data. Each model was rated on its cheapest-to-insure trim level. This year’s 20 best-selling vehicles list included:

  1. Ford F-150 XL SFE
  2. Ford Fusion S
  3. Ford Escape S
  4. Ford Explorer XLT
  5. Chevrolet Silverado 1500 LT
  6. Chevrolet Malibu LS
  7. Dodge Ram 1500 Tradesman
  8. Toyota Camry LE
  9. Toyota Corolla L
  10. Toyota RAV4 LE
  11. Honda Civic LX
  12. Honda Accord LX
  13. Honda CR-V LX
  14. Chevrolet Equinox LS
  15. Nissan Altima 2.5 S
  16. Nissan Rogue S
  17. Nissan Sentra S
  18. Hyundai Sonata SE
  19. GMC Sierra 1500
  20. Jeep Cherokee Sport

The national average for a full-coverage policy as featured in the Insure.com report came in at $1,325 this year – a slight increase from last year’s average of $1,311. Rates varied from a low of $808 a year in Maine to a budget-busting $2,738 in Michigan. Insurance rates in Michigan are more than double (107 percent) the national average.

Insurance rates are influenced by a number of different factors. Everything from traffic, crime rates, state and local laws, the percentage of uninsured drivers, as well as the number of car insurance companies competing in a market can all result in higher, or if you’re lucky, lower insurance premiums in your state.

States with highest car insurance

The reasons behind the highest state rates include everything from Personal Injury Protection (PIP) coverage (a big factor in two of the states) to high fatality rates and litigious-minded drivers.

Here are the top three most expensive states for car insurance and why they are so expensive:

#1 Michigan -- Michigan’s no-fault insurance structure is largely responsible for the high cost of car insurance in the state.

“Michigan auto consumers pay more than most states for car insurance due to the state’s high medical mandate. Michigan is the only state in the country that requires auto consumers to purchase unlimited, lifetime medical benefits as part of the auto insurance policy,” explains Lori Conarton with the Insurance Institute of Michigan.

“Unfortunately, it’s Michigan’s auto insurance consumers who pay the price for this unique auto insurance law,” continues Conarton.

Michigan, like most other no-fault states, requires its drivers to buy personal PIP insurance. PIP coverage will pay the medical bills of the policyholder as well as any passengers and family members that are in the vehicle at the time of the accident.

The big difference is in the amount of PIP coverage that Michigan requires of its drivers. Florida, for example, only requires drivers to carry $10,000 in PIP coverage, while Michigan’s no-fault policies must offer unlimited medical benefits, which pushes the price up dramatically.

Michigan requires insurers to cover medical claims up to $530,000. The nonprofit Michigan Catastrophic Claim Association (MCCA) covers damages above that amount. In addition to high insurance premiums, Michigan drivers must pay an annual assessment to the MCCA, which in 2016 is $150.

The high cost of car insurance pushes many drivers out of the market. According to the Insurance Information Institute (III), an estimated 21 percent of Michigan drivers were uninsured in 2012. High numbers of uninsured drivers raise rates because there are fewer drivers (and their premiums) to share the risk pool.

The high cost also leads to – while technically legal – unscrupulous behavior. Some Michigan drivers will purchase a seven-day policy (which insurers in Michigan sell) so they have proof of insurance when registering their vehicle and then let the policy expire after a week, leaving them uninsured.

Unfortunately, rates are probably not coming down anytime soon. Until the PIP requirement is changed or ditched altogether, insurance rates will remain high in Michigan.

#2 Montana -- Montana stayed in the No. 2 spot for the second year in a row with an average premium of $2,297, which is 73 percent higher than the national average and a whopping $411 increase over last year’s Insure.com Montana average.

There are a number of factors that increase rates in Big Sky country, but one of the biggest is the accident rate. Wide-open spaces and lonely roads lead to a lot of car accidents and fatalities. According to the Insurance Institute for Highway Safety, Montana has the highest vehicle accident fatality rate in the country with 22.6 deaths per 100,000 people – twice the national average.

#3 New Jersey --The Garden State makes the top five for the first time. The average premium in New Jersey came in at $1,905, which is 44 percent higher than the national average.

According to Kacy Campion Renna, vice president of the Professional Insurance Agents of New Jersey, high accident rates may have something to do with New Jersey’s costly insurance. “New Jersey ranks No. 1 when it comes to population density, which means there’s a greater chance of having an auto incident here.”

Renna also cites other factors that can impact rates in New Jersey. “Other factors to consider are high medical costs, high rates of auto and medical fraud combined with the fact that the New Jersey residents tend to be pretty litigious.”

Fraud has become a fact in New Jersey’s PIP coverage. New Jersey allows PIP coverage levels up to $250,000, which is the second highest in the country, behind Michigan. Unfortunately, PIP fraud has shot up which raises the cost of insurance for everyone in the state.

States with the cheapest car insurance

The low cost of car insurance in the least expensive insurance premium states can be attributed to a number of factors, including fierce insurer competition and low numbers of uninsured drivers.

#49 Wisconsin – The Badger State is No. 3 when it comes to inexpensive insurance. A yearly premium of $912 makes car insurance a bargain in Wisconsin. Wisconsin benefits from a pretty rural environment and a very competitive insurance market. A lack of major cities helps keep accident rates down.

According to numbers from Highway Loss Data Institute (HLDI), Wisconsin has 1 death per 100 million vehicle miles traveled in 2013. Montana, the second-most expensive state on the list, recorded 1.96, which was the highest on the list in the same year.

In addition, Wisconsin residents are not particularly litigious, which makes insurance companies happy and leads to lower rates across the state.

#50 Ohio – With an average annual premium of $899, Ohio is No. 2 for affordable car insurance for the second year in a row, and the state has spent quite a bit of time in the top five over the last six years.

“Ohio is home to many national and regional insurers because of its stable legal and regulatory environment. This creates a competitive marketplace for consumers, leading to great rates and a variety of products and services from which to choose,” explains Perk Reichley, President of Reichley Insurance Agency.

According to the Ohio Insurance Institute, there are currently more than 650 insurance carriers writing policies in the state. Compare that number to the approximately 134 in California and just over 40 in New Jersey, and it’s plain to see how competition has positively affected the rates.

#51 Maine – Maine has hit the No. 1 spot for two years running, and it’s finished in the top three every year of the Insure.com study. The average premium came in at $807 per year, which was a tiny $2 increase over last year.

Maine is a convergence of favorable factors; they have very few large urban areas so traffic is usually not a problem, which in turn keeps down accident rates. In addition, though Maine gets a lot of snow, the state doesn’t usually suffer from major weather incidents like tornadoes and hailstorms, which can do serious and expensive damage to a car.

Maine drivers take their insurance responsibility seriously with a mere 4.7 percent of uninsured drivers, according to the Insurance Information Institute. This makes them No. 2 in the country for uninsured drivers with only Massachusetts beating them out. When everyone is insured, prices go down.

Providing real cost estimates

The Insure.com study differs from other studies, such as the National Association of Insurance Commissioners (NAIC) rankings, in that it compares how much it would cost a driver to buy the same coverage in each state. The NAIC rankings calculate the average amount drivers spend on auto insurance -- regardless of what coverages and levels of coverage are purchased.

How much does car insurance cost?

It’s important to remember that these numbers are averages and will not reflect your actual policy price. Insurance prices are highly personalized, and many factors will affect your rates, including the type of vehicle you drive, the coverages you choose to carry, your specific neighborhood and, in certain states, even your credit rating.

Insure.com’s study of the most and least expensive vehicles for 2016 includes easy-to use tool for viewing nationwide car insurance rates for 2016 vehicles or looking at state specific average rates, and allows you to compare up to 10 vehicles at once.

Shop your coverage annually to make sure you are getting the best car insurance rates available, ask for discounts and consider bundling your coverages to save money.

Average cost of car insurance by state

AL AK AZ AR CA CO CT DC DE FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY More than $100 below national averageWithin $100 of national averageMore than $100 above national average

See Insure.com's Best Car Insurance Companies

Methodology

Insure.com commissioned Quadrant Information Services to calculate auto insurance rates from six large carriers (Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm) in 10 ZIP codes per state. Rates were compiled in February 2016.

We averaged rates in each state for the cheapest-to-insure 2016 model-year versions of America’s 20 best-selling vehicles and ranked each state by that average. Rates are for comparative purposes only within the same model year.

Rates are based on full coverage for a single, 40-year-old male who commutes 12 miles to work each day, with policy limits of 100/300/50 ($100,000 for injury liability for one person, $300,000 for all injuries and $50,000 for property damage in an accident) and a $500 deductible on collision and comprehensive coverage. The hypothetical driver has a clean record and good credit. The rate includes uninsured motorist coverage. Actual rates will depend on individual driver factors.

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There has been a sharp rise in the number of over-40s who are struggling to get a mortgage or remortgage to another deal because of their age, brokers have warned.

Two in five brokers have reported a rise in people above this age struggling to be approved by lenders, according to a survey by Nottingham Building Society.

In a worrying trend, more than a third of brokers expect the number of over-40s having problems securing home loans will continue to rise this year.

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Age block: Brokers are warning that many aged over 40 are being penalised by mortgage lenders

Age restrictions on mortgages have become a sticking point in recent years. According to Halifax, first-time buyers are taking their first step onto the property ladder at an average age of 31.

Most mortgage terms are between 25 and 30 years, meaning many could face paying off their mortgage at 56 or 61.

With lenders reluctant to lend into retirement, a first-time buyer aged 40 could find themselves struggling to get a 30-year mortgage.

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Others who buy even later than this face still paying off their mortgage in retirement, something lenders are often not keen on approving.

In the past two years, 17 per cent of those who have been turned down for a mortgage or a remortgage say age has played a major factor. This rises to 21 per cent among those aged 45 to 54.

Around one in four of those whose age counted against them say they were not able to borrow for long enough while the rest were turned away because either they or their partner were too old.

Older borrowers are seen by some lenders as more risky because they will still have outstanding debt once they have stopped earning. 

However many will have even more secure incomes than those in work, as they will have a guaranteed state pension as well as private pensions. 

Some workers still benefit from final salary pensions, which provide a guaranteed retirement income for life. This is even more secure than a salary, which can stop in the case of redundancy or poor health. 

Lenders also don't necessarily take into account that people are working for longer and longer and many will not be giving up work completely just because they've reached retirement age.  This trend is expected to continue as people's life expectancy continues to rise. 

Older borrowers wanting to borrow for terms that go beyond retirement age are often asked for evidence of their expected income. 

One This is Money reader, who is in their 40s, was even asked for state pension forecast from a lender, which is only available to those aged over 55.

Mortgage lenders are working to ease the rules that count against older borrowers – the Council of Mortgage Lenders and Building Societies Association are both working with members to make it easier and some lenders have increased their maximum ages.

Meanwhile, Nationwide said today it will now use a borrower's anticipated retirement age in its affordability check rather than using the state pension age, if this is lower.

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Locking in early: It can get tougher to secure a mortgage beyond the age of forty or so, according to Nottingham Mortgage Services

Britain's biggest building society said the maximum retirement allowed will remain at 70, while the mortgage term must end before the eldest applicant's 75th birthday.

Ian Gibbons, senior mortgage broking manager at Nottingham Mortgage Services, said: 'It is baffling for people in their early 40s to be told they are too old to have a mortgage and particularly so when the average age of first-time buyers is rising which means some could even be first-time buyers.

'There is no doubt creditworthy customers are being rejected and some are facing restrictions on their choice of mortgages.

'However there are options out there for older borrowers and the key to ensuring they get the most appropriate mortgage is to search the whole market. If your existing lender is restricted on what it can do there are other options.'

The research shows the main reason for being turned down for a mortgage or remortgage is a poor credit history – 38 per cent of those who were turned down say their credit record counted against them while 19 per cent were rejected on grounds of affordability. 

MORTGAGE LENDING AGE CAPS 

Most lenders will consider lending beyond a maximum age on a case-by-case basis.

The policies of the biggest lenders are:

Royal Bank of Scotland

Income will be assessed after age 65 up to age 70

Santander

Maximum age of 75

Lloyds Banking Group

Maximum lending age of 75 across Halifax, Lloyds TSB and Bank of Scotland

HSBC

Maximum age of 75 for capital repayment and interest-only. Will consider extensions

Barclays

Maximum age of 70, consideration will be given to extend the mortgage term beyond the maximum age, however evidence of how the applicant intends to repay the mortgage in retirement. 

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Getting the right cover is the most important thing, and then you should look for the cheapest policy.

Choose the right level of cover

There are three levels of car insurance cover you can choose from in the UK:

  • Fully Comprehensive
  • Third party, fire and theft
  • Third party cover only

Here is what each level protects you against, and how to choose which is right for you.

What car insurance cover should you get?

Find the best policy for you

There are several different types of motor insurance policy, and choosing the right one could save you money.

  • Standard car insurance: Here is what a standard car insurance policy with cover.
  • Multi car insurance: Insuring two or more cars on one policy could mean cheaper cover; find out how it can save you money here.
  • Black box insurance: You can save by having your driving monitored through a black box policy; here is how it works.

Should you add extras?

You can customise your policy and extend your cover by adding extra benefits. These include:

  • Legal cover - here is how to work out if you need it
  • Breakdown cover
  • Cover for lost or stolen keys
  • No claims protection
  • Cover for driving abroad

Here is a full list of the car insurance extras that could be worth adding to your policy.

Check your policy to see if any of these are included as standard, and if not, consider whether it is worth the additional cost to add them.

Which car insurance extras are worth having?

How to get quotes from our comparison

You can get quotes from our website via the aggregator from our panel of insurers. Make sure you also compare separate policies in our table to make sure you get the best deal.

It can be a quick and easy way to find cheap policies, but be careful not to buy car insurance on price alone:

Pros and cons of comparison sites

  • Get lots of quotes quickly
  • Quotes shown in price order
  • Only one form to complete
  • Not all insurers are on them
  • Can be cheaper if you go direct
  • Multi car policies not shown

Car insurance FAQs

Q

Can I drive a car without insurance?

A

No, it is a legal requirement to have at least third party car insurance cover to drive in the UK.

Q

How can I get cheaper car insurance?

A

There are several things you can do to get cheaper cover. Try these 10 easy ways to cut your car insurance costs.

Q

What does car insurance cover?

A

It can cover damage to your and another driver's car after an accident. It can also cover theft, vandalism and fire.

Q

Is it cheaper to pay annually or monthly?

A

Paying annually in one go will usually work out cheaper because you will be charged interest of up to 30% when you pay monthly.

Q

Should I let my policy automatically renew?

A

No, your current provider will not usually offer the cheapest deal so shop around and find a new policy instead of renewing.

Q

Can I get insurance for an imported car?

A

Yes, you can use our quote service to find cheap cover for your imported car. You can select whether your car is a grey or parallel import.

Q

Can I check if a car is already insured?

A

Yes, you can check if a car has a valid insurance policy in place through the Motor Insurance Database (MID).

Q

How long does car insurance last?

A

Most car insurance policies last one year, but you can cancel your cover for a fee. You can get short term cover for between one day and three months.

Q

Can I drive other cars?

A

If you have a fully comprehensive policy you might be covered to drive other people's cars, but some polices do not allow this.

Q

Can I switch my policy to another car?

A

Yes, if you buy a new car you will need to tell your insurer so they can update your policy. The cost of your cover will probably change.

About our car insurance comparison

Q

Who do we include in this comparison?

A

We include every insurer that offers comprehensive and third party, fire and theft car insurance policies in the UK. They are all regulated by the Financial Conduct Authority. Here is more information about how our website works.

Q

How do we make money from our comparison?

A

We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.

You do not pay any extra and the deal you get is not affected.

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