Average car insurance premiums in New Hampshire are around $1,334 per year, consistent with the overall average in the country. As the 34th most expensive state, New Hampshire rates avoid extremes on both ends of the spectrum. Insurance in New Hampshire costs slightly more than neighboring Massachusetts, and is much more expensive than highly-affordable Vermont and Maine. There are several reasons why car insurance may cost more in New Hampshire than neighboring states, and taking the time to understand auto why insurance prices fluctuate should help in obtaining the most affordable policy.

Of course, the cost of car insurance varies tremendously from one driver to the next, and average premiums are only a guideline for how much a policy might cost. A person’s actual auto insurance rates could be higher or lower than the state average depending on his driving record, type of car insured and what coverage is included in the policy.

What determines the cost of car insurance in New Hampshire?

The cost of insurance premiums is influenced not only by the individual being insured but also geographic factors of an individual state. Areas prone to severe weather may have a higher incidence of accidents and weather-related claims than more temperate climates, and cities have more heavily congested traffic and higher crime rates than rural communities.

One of the largest contributors to the cost of auto insurance is the number of uninsured drivers in an area. Uninsured drivers pose a tremendous financial risk to insurance companies because they can cause accidents that they cannot pay for themselves. An insurance company will usually recover the cost of a claim from the at-fault driver’s insurance company; if these funds cannot be recovered, the insurance company loses the money spent on those repairs. In order to compensate for the lost revenue, an insurance company must increase rates across the area.

New Hampshire has a higher rate of uninsured motorists than neighboring states, which is one reason why it may have higher premiums. Roughly 11 percent of drivers in New Hampshire are uninsured, compared to 6 percent in Vermont and just 4 percent in Maine. When compared to the rest of the country, however, 11 percent is still a very low figure; some of the more expensive insurance states like New Mexico have twice as many uninsured drivers.

Drunk driving also influences the cost of car insurance in an area. In 2009, only 110 people died in auto collisions; of these, 36 were alcohol-related. This is substantially lower than the national average, but somewhat higher than neighboring Vermont, which has the lowest insurance costs in the country.

Overall, insurance in New Hampshire is more affordable than the much of the country, but higher than neighboring states. This is due in large part to the extremely low cost of coverage in Vermont and Maine, which are two of the cheapest states for auto insurance. New Hampshire simply cannot compete with the stiff competition.

The other reason why New Hampshire coverage is higher than other states in the area is that the state has higher car insurance requirements. When insurance policies with identical coverage are compared from one state to the next, the cost difference narrows tremendously.

New Hampshire Car Insurance Requirements

In order to register a vehicle, New Hampshire drivers must carry the minimum amount of liability insurance required by the state. Drivers must have at least $25,000 per accident in property damage liability and $25,000/$50,000 in bodily injury liability coverage. These are the coverage limits for the insurance company, so it is possible that a driver may be held personally responsible for paying damage over the limit. In order to protect his assets from lawsuits, a driver should maintain as much liability insurance as he can afford.

New Hampshire also requires all drivers to carry uninsured motorist coverage. This coverage replaces the liability insurance for another person any time a driver without insurance causes an accident. While available in most states, uninsured motorist coverage is not a legal requirement in all areas. In New Hampshire, uninsured motorist insurance can be used for both injuries and damages; the limits will be the same as the liability limits of the policy.

Personal injury protection coverage is also a requirement in New Hampshire, although the required limit is very low. Drivers must purchase at least $1,000 in PIP insurance on all vehicles. New Hampshire is a tort state, meaning that injured drivers can sue for medical expenses when they are not at fault for an auto accident, but PIP coverage can help drivers pay for medical costs regardless of fault. This means that even if a driver causes the accident, his insurance can still pay for the injuries he sustains; without PIP coverage, this would not be possible.

Drivers who are making payments on their vehicles must also purchase collision and comprehensive coverage. Drivers who own their vehicles outright do not need to buy full coverage insurance, but it’s a good idea to carry collision and comprehensive on any vehicle that is new or valuable. Cars that are no longer worth repairing do not need full coverage insurance.

Whether you are a current New Hampshire resident or have recently move to the state, it’s easy to find affordable car insurance by comparison shopping online. Once you submit the form for a free insurance quote, you will be able to search dozens of companies that can provide affordable coverage in your area.