Most states require everyone that owns a motor vehicle to purchase vehicle insurance. It is well known that insurance rates vary based on several factors such as age, gender, driving history, and level of education or membership in professional associations. But, did you know that how much you pay for car insurance also depends on what state you live in?

Analyzing data from insure.com, we put together a map comparing car insurance premiums in each state. It turns out that Michigan has the highest average annual car insurance rates ($2,476). Michigan is followed by Montana and Washington, D.C. at $1,886 and $1,799, respectively. The lowest rates in the country are in Maine at $805 per year, much lower than the national average of $1,311.

The results were obtained by compiling rates from six large insurers in ten ZIP codes in each state. To get a reliable state-by-state comparison, all rates are for a 40-year-old male with a clean driving record and good credit. Therefore, if you are a younger driver (particularly a young male driver), you can expect to pay more than the listed amount in your state. Also, only the 20 best-selling vehicles in the U.S. – representing 40% vehicle sales – were used for the comparison. Smaller cars with lower horsepower will tend to cost less for insurance than large vehicles like the best-selling Ford F-150, Chevy Silverado, or Dodge Ram.

The large disparity between states is a result of several factors including state laws, local court structures, traffic density, crime levels, market competition, and the percentage of insured drivers in the state. The reason why insurance in Michigan is so much higher than in other states is because all drivers there are required to purchase personal injury protection (PIP) insurance that covers all medical expenses in the event of an accident. Other states require only limited PIP insurance coverage. This requirement has led to a low rate of insured drivers in the state, and the Mayor of Detroit has recently announced plans to introduce low-cost insurance to solve this problem.

In Montana, high rates are likely due to a liberal court system that favors insurance policy holders, substandard driving safety laws, and the highest car accident fatality rate in the country. In Washington, D.C., high rates are due to traffic congestion, a litigious society, and the fact that it is a relatively small market. The states with the cheapest premiums tend to have competitive markets, high rates of insured drivers, and very few traffic problems.

The variety in the insurance rates between states reflects the economic diversity of the U.S. Each state is unique in terms of its transportation challenges and legislation. States with heavy traffic congestion and high accident rates tend to be more costly, while states with a large rural population and high rates of insured drivers tend to have lower rates.