Rhode Island is the 13th most expensive state for car insurance in the country, with premiums averaging around $1,747 each year. Despite its size and relatively low population density, Rhode Island car insurance rates are higher than neighboring Massachusetts, but somewhat lower than Connecticut. Several factors influence the cost of auto insurance so you need to understand why premiums cost what they do and how to make the best choice for purchasing auto coverage.

What Factors Influence Car Insurance Rates?

Car insurance premiums are determined based on a complex algorithm that accounts for dozens of factors. Essentially, car insurance companies base their rates on the likelihood of a vehicle being involved in a claim. The more likely a person is to file a claim, the more his auto insurance will cost. Risk is assessed at both a personal level and on a larger scale by the geographic area where the vehicle is being insured.

On a personal level, car insurance companies look at a driver’s driving history, history of traffic citations, credit score and other information. On a larger scale, auto insurance companies will assess an area for risk factors such as heavy traffic, weather-related concerns, number of uninsured drivers in an area and incidence of drunk driving. Some states will also have higher insurance costs than others due to state laws surrounding policies in the state; states with high minimal insurance requirements will have a higher average insurance cost than areas with lower requirements.

In Rhode Island, most of the risk factors for high insurance are not present. As a small state, Rhode Island does not have the long commutes or heavy traffic of other areas. Auto theft is also not a major concern in the area, and Rhode Island has one of the lowest rates of drunk driving in the country, ranking 47th of all states for DUI-related accidents.

There is a relatively high rate of uninsured motorists in Rhode Island. Approximately 18 percent of all drivers in Rhode Island are uninsured. While certainly not the highest in the nation, this is higher than neighboring states and plays a key role in the cost of auto insurance. Unfortunately, high premiums result in more people choosing to drive without car insurance, resulting in a perpetuating cycle.

The primary reason that car insurance in Rhode Island is more expensive than neighboring states is that the required coverage is higher than many other areas. The average cost of insurance may be higher in Rhode Island, but if similar policies are compared from one state to the next Rhode Island would actually be surprisingly affordable.

Car Insurance Requirements in Rhode Island

Rhode Island requires all all drivers to carry a minimum of $25,000 in property damage liability insurance. This coverage pays for damage caused to another person’s property or vehicle. Additionally, Rhode Island requires bodily injury liability insurance of $25,000 per injured person up to $50,000 per each accident.

Although these liability limits are higher than in other states, it’s always a good idea for a driver to buy as much liability insurance as he can afford. This protects his assets from lawsuits after a car accident and ensures that his coverage can pay for any damage he may cause in an accident.

Rhode Island also requires all drivers to carry uninsured motorist coverage with limits equal to their liability coverage. Uninsured motorist insurance pays for damage caused by drivers who do not carry insurance and replaces the responsible driver’s liability insurance.

In addition to basic liability insurance, Rhode Island drivers can purchase collision, comprehensive, rental reimbursement, towing and other first-party insurance coverage. First-party insurance coverage isn’t necessary for older vehicles or those that have depreciated past their values, but it is necessary to carry collision and comprehensive coverage on any vehicle that is currently being financed. Once the car has been paid off, the driver can decide whether or not to drop coverage down to a liability-only policy.

For drivers who cannot obtain insurance through a regular company, the state of Rhode Island does offer a high-risk insurance policy option. The driver must submit proof of being denied coverage; the premiums will be higher than they would be through a standard insurer, but it does provide an option for people who are unable to get auto insurance through other means.

Whether you’ve just moved to Rhode Island from another state or are looking for cheaper auto insurance in the area, it’s possible to find affordable auto insurance online. Comparison shopping between different Rhode Island auto insurance companies will allow you to find the best deal on a policy that includes all of the coverage you need.