Worst States for an Auto Insurance Claim

Cars are expensive. They need regular repairs, gas will drain your wallet, plus there are insurance premiums to pay.

Unfortunately, the vast majority of Americans need a car because they don’t have the public transit systems of, say, Manhattan or Washington, D.C. AAA reported that the average yearly cost to own and operate a sedan (driving 15,000 a year) is $9,122.

And then there’s what happens in an accident. According to Allstate, the average driver in the U.S. will experience an auto collision every 10 years. And many find their premiums skyrocket after the first accident, according to a new study commissioned by InsuranceQuotes.com.

The study looked at how by much annual premiums go up after filing a bodily injury claim, a property damage claim or a comprehensive claim. The nonprofit Insurance Information Institute reported that the average auto liability claim for bodily injury in 2012 was $14,653; an average of $3,073 for property damage; and an average of $1,585 for a comprehensive claim.

On average in the U.S., premiums increase by 38.2% after the first claim. In Maryland, your premium will only increase by 20.5% (the lowest in the nation) after your first $2,000-plus claim. Rate increases typically last three years (as long as you don’t make another claim during this time) before going back down.

These 10 states had the largest increase in premiums after just one $2,000-plus claim.

10. Hawaii

Annual average premium: $766

Premium after one claim: $1,052

Percent increase: 37.4%

Maui

Perhaps Hawaii’s increase isn’t all that horrible: it’s less than the country’s average. But then some states reported huge increases in premiums after just the first claim. (And some of them weren’t very cheap to begin with!)

9. Washington

Annual average premium: $815

Premium after one claim: $1,125

Percent increase: 38%

Mount Rainier. Copyright Kelvin Kay, Kkmd

Not only can it become pretty expensive to insurance your care after just one claim, but Washington state took two of the top 10 hot spots for stolen luxury cars, according to 2012 data from the National Insurance Crime Bureau.

8. Nevada

Annual average premium: $931

Premium after one claim: $1,296

Percent increase: 39.2%

North Las Vegas with the Strip in the background.

Nevada’s residents likely can’t really afford the large hike in insurance premiums after the first claim. Although it has one of the best tax climates (no income tax!), its foreclosure rate is still very high and a survey from the Corporation of Enterprise Development named Nevada’s residents the least financially stable with an average $10,670 in credit card debt.

7. Kentucky

Annual average premium: $723

Premium after one claim: $1,027

Percent increase: 42.1%

Bowling Green

The yearly cost of gasoline for a car in Kentucky is roughly $1,100, according to a Bankrate.com survey, making the state one of the most expensive to own a car. The 42% hike in annual insurance premiums might be too much for residents, though: Kentucky is already one of the most stressed states with 44.8% of the population reporting feeling stressed “yesterday.”

6. Arizona

Annual average premium: $804

Premium after one claim: $1,155

Percent increase: 43.7%

Cathedral Rock in Sedona. Photo by Ken Thomas.

Bankrate.com ranked Arizona the sixth most expensive state to own a car, and that was even before the hike in insurance premiums after the first claim. It can cost $3,886 annually to own a car between insurance, taxes/fees repairs and gasoline.

5. Minnesota

Annual average premium: $693

Premium after one claim: $1,008

Percent increase: 45.4%

Minneapolis

In general, Minnesota can be very expensive to live in. It’s regularly named one of the worst states to retire (based on taxes, access to care and cost of living), and it’s one of the most expensive to raise a child (it’ll cost $9,700 a year for child care).

4. North Carolina

Annual average premium: $600

Premium after one claim: $884

Percent increase: 47.3%

Charlotte

North Carolina’s premiums are among the lowest in the country (only Idaho, Iowa, Nebraska, North Dakota and South Dakota are lower), but that’s before making the first claim. While premiums are still the lowest in the top 10 (the only state that doesn’t break the $1,000 mark) after the first claim, drivers will see a significant increase.

3. New Jersey

Annual average premium: $1,157

Premium after one claim: $1,846

Percent increase: 59.5%

Boardwalk at Atlantic City.

The average annual premium for New Jerseyans was already the most expensive in the entire country, although by a close margin. However, after the first $2,000-plus claim no other state comes close. The state with the second-highest premium after one claim is still $350 cheaper than New Jersey.

The good news is, gas is cheap in New Jersey.

2. California

Annual average premium: $746

Premium after one claim: $1,206

Percent increase: 61.7%

Gaslamp Quarter in San Diego. Photo by Leandro Neumann Ciuffo.

California is expensive. It’s not surprise. So perhaps the big surprise in seeing California on the list is that it isn’t number one. Unfortunately, if it sounded bad that Washington state has two of the top 10 hot spots for most stolen luxury vehicles, California has it worse: the remaining eight spots are all in the Golden State.

1. Massachusetts

Annual average premium: $891

Premium after one claim: $1,492

Percent increase: 67.4%

Harvard Square in Cambridge.

Massachusetts is one of the most expensive states to drive a car. Not only is the insurance pricey, but gasoline isn’t cheap, plus taxes/fees, the cost of repairs and it can cost $3,600-plus to own and drive a car.