Mainers catch a big break on auto insurance

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While Maine may be near the top of the list for high taxes, we can take consolation in another ranking: Our average auto insurance rates are the lowest in the land.

And buckle up for this — the differences among the states are significant.

The average annual auto insurance bill in Maine was $903 in 2009, according to a study performed by Quadrant Information Services.

The highest state? You’re probably thinking big city, congestion, high theft rate, right?

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Not exactly.

Louisiana tops the list with an average premium of $2,511, or a remarkable $1,608.02 more than what is paid by the typical Mainer.

Rounding out the top of the list were Michigan, Oklahoma, Montana and California, ranging from $2,098 to $1,774.

Joining Maine at the bottom of the list were Vermont, Ohio, Wisconsin and New Hampshire, all with average premiums within $100 of each other.

The national average was $1,429.

So, what accounts for Maine’s low rates? Superior driving ability?

While we would all like to think so, that doesn’t appear to be a factor. Chris Condon, president of the Maine Insurance Agents Association, gave insure.com this explanation:

First, we don’t have any significant urban areas. The biggest city in the state, Portland, is really a small burg by national standards, meaning we drive on relatively uncongested roadways.

Second, we don’t drive as much as the average American. Our average annual mileage is lower, exposing us to fewer risks.

Third, there is plenty of auto insurance competition in the state with at least 30 carriers offering coverage.

Finally, Condon says, we’re less litigious. “People are less likely to sue than they might be elsewhere,” Condon said. When wronged, we tend to seek fair compensation rather than a big payday.

Surprisingly, variations in state law have a big impact on auto insurance rates.

In Louisiana, for example, claims more than $50,000 go to jury trials. As a result, there is pressure on insurance companies to settle for $49,999 rather than pay for a jury trial.

And, with elected judges and sympathetic juries, settlements and jury awards in Louisiana tend to be larger.

Capping things off, Louisiana residents file more lawsuits per capita than other states.

So, the $500 or so you’re saving on auto insurance should come in handy today when you pay your state income tax, one of the highest and least progressive in the country.

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