It’s hardly ever a surprise when Hawaii tops national cost-of-living lists. But the state is among the more affordable when it comes to car insurance, says an online insurance website.
Hawaii is the seventh most affordable state for having auto insurance, according to InsWeb’s 2010 Car Insurance Affordability Index. The most affordable state for car insurance is Massachusetts; the least, Louisiana.
The most affordable and least affordable car insurance states:
"I think it goes along with driving with aloha in Hawaii," said Linh DePledge, vice president of sales and marketing for DTRIC Insurance. "Part of the rates has to do with the driving behaviors of citizens."
A state’s affordability was determined by dividing the median household car insurance rate by its median household income. The lower the factor, the less a typical family in that state has to pay for car insurance relative to its budget.
InsWeb used its internal customer profiles and matched them with insurance rates in various states, said Brad Cooper, senior vice president of product, site and marketing of the California-based company.
"Insurance prices vary dramatically by region. Sometimes they vary all the way down to the ZIP code," Cooper said. "Most people don’t realize how much they actually spend on insurance in any given year."
Hawaii had fewer than 1,000 price quotes from customers, which he said was a small sample size compared with other states.
"The affordability may be reflective of individuals (in Hawaii) who want to save money, so the rates would be lower," Cooper said.
Cooper said the company does not want to draw too many conclusions, but it wanted to provide a general guideline on spending nationwide.
InsWeb Corp., founded in 1995, owns and operates a network of leading insurance and education websites. It has a customer base of 10 million nationwide.
DePledge said another factor for lower rates in Hawaii could be the relatively small area for travel, which means less traveling overall, and good weather, which would contribute to fewer accidents and less severe crashes.
"Certainly we’re a large city, but you don’t hear of the fatality rates that you do in other cities," DePledge said.
"The frequency and severity is not there."