Drivers in Connecticut are paying more for car insurance than most other Americans.

Studies show there are several reasons Connecticut drivers pay so much for insurance, such as  the state’s high income levels and cost of living. But other factors also come into play, analysts say, including action – or inaction — by state regulators and the  factors companies in Connecticut are allowed to use to determine how much to charge for coverage.

Insurance is regulated by the state. But unlike health insurers, who must receive approval from the Connecticut Department of Insurance before they raise premiums, auto insurers simply notify the state they are raising premiums and it’s up to the state to object.

“State insurance departments are fairly pro-market operations,” said Steven Weisbart, an economist for the Insurance Information Institute. “They don’t try to affect the level or rates too much other than to see they aren’t too excessive.”

The latest study of auto insurance rates by the National Association of Insurance Commissioners  showed that only nine states, and the District of Columbia, had higher average premiums than Connecticut. The average annual premium in Connecticut in 2010, the last year studied, was $1,065.92, according to the NAIC report.

Louisiana had the highest average premium ($1,294.94) and Iowa the lowest ($644.63.)

The average national annual premium was $907.38.

The Connecticut Insurance Department pointed to several factors that account for the state’s high rates.

The department says Connecticut is an “urban state.” Only six  states and the District of Columbia have a higher percentage of people  living in metropolitan areas. Higher population density in  urban areas generally results in more congested areas and a higher ratel of traffic accidents.

But Massachusetts has a much higher population density  than Connecticut, and according to the NAIC report, its average premium was $957.89.

The state insurance department also said road congestion is high in Connecticut, which may drive up rates. But it’s higher in Massachusetts.

Another factor cited by the Connecticut Insurance Department is the state’s affluence.

“In general, policyholders in areas with higher disposable income have more expensive vehicles and also buy higher limits of liability coverage. This directly translates into higher premium,” the department said in an e-mail.

Weisbart agrees that could be a big reason drivers in Connecticut pay more than drivers in Alabama.

He points to the “pain index” compiled by the Auto Insurance Report, an industry newsletter that  indexed auto insurance premiums against median incomes in every state. The pain index showed Connecticut dropped to 28 in the rankings.

“If you get paid more and can afford an expensive car, you can afford to pay more than some of the other people.” Weisbart said.

But if Connecticut’s rich are driving the price of insurance up, it’s Connecticut’s poor who are getting walloped.

Not every driver in the state pays the same premium for the same amount of coverage. Factors like income, education  and occupation are used by some insurers  in Connecticut– with the notable exception of Travelers — when they establish premiums. Low-income people with little education pay more.

The state requires insurers to use other factors, including credit record, age, sex, marital status, vehicle type, model year and driving history. Some of those factors could disproportionately affect low–income drivers.

Where you live in a state also helps determine premiums. So a low-income driver in Hartford is rated as a higher risk than a wealthy driver in Danbury.

In Connecticut there’s no way to drive legally without insurance. In fact, all states except New Hampshire require drivers to purchase at the very least a basic liability policy that covers damages to others but not the policyholder’s losses.

Other studies, using other methods, also show Connecticut drivers pay high premiums.

A recent analysis by, an insurance rating web site, determined that a comprehensive policy for a single, 40-year-old man in Connecticut with a clean driving record and a new car cost $1,723 last year. That was the nation’s 11th highest average annual premium . New Jersey was 12th at $1,697 and New York was 33rd at $1,369.

The study was based on rates obtained for more than 750 models of new cars insured by the nation’s biggest companies: Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm.

In the report, Louisiana had the highest  average car insurance premium,  $2,699, and Maine the lowest at $966.

Amy Danise, editorial director of, said the high cost of living in Connecticut is also likely to push costs up.

“A lot of people in Connecticut have nicer cars and when they get smashed it costs more money to fix them,” Danise said.

There’s evidence medical costs are also pushing insurance rates up. According to the NAIC report, the average car crash claim that included injuries was worth an average of  $12,437 nationally and $19,231 in Connecticut.

Weisbart of the Insurance Information Institute said medical costs are likely to account for much of the difference.

Connecticut’s auto insurance rates are likely to continue to climb. The Connecticut Insurance Department allowed auto insurers in the state to raise premiums  nearly 12 percent in the past five years. The  average hike for 2012 was nearly 3 percent.

There isn’t much Connecticut drivers can do to lower their rates, other than clean up their driving and credit records, marry, purchase cheaper and safer cars, lower the amount of coverage and  raise deductibles.

Connecticut drivers can also shop for the best deal. Connecticut Insurance Department spokeswoman Donna Tommelleo said there are more than 100 companies providing automobile coverage in the state and that should provide competition, although a handful of big carriers dominate the market.

Peter Kochenburger, executive director of the Insurance Law Center at the University of Connecticut, also promoted making insurers compete for your business.

“The idea is, you are going to force prices down even if regulators allow high rates here than in Massachusetts or Kentucky,” he said.

Suffering from high auto insurance rates 25 years ago, California decided to do what no other state, including Connecticut, has done.

California voters approved Proposition 103 in 1988 requiring  auto, homeowners, medical malpractice and other business insurance companies to publicly justify and get rates approved by the state insurance commissioner before taking effect.

The law created an elected insurance commissioner, required auto insurance rates be based primarily on driving record, miles driven and experience, and prohibited insurance companies from discriminating against drivers based on ZIP code or whether they had previously been insured.

The result, said the Consumer Federation of America, is that Californians spent less per year on auto insurance in 2010 than they did in 1989. The average auto insurance premium in California in 2010 was $746.

Ana has written about politics and policy in Washington, D.C.. for Gannett, Thompson Reuters and UPI. She was a special correspondent for the Miami Herald, and a regular contributor to The New York TImes, Advertising Age and several other publications. She has also worked in broadcast journalism, for CNN and several local NPR stations. She is a graduate of the University of Maryland School of Journalism.

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