With nearly three million drivers in South Carolina, it’s surprising to know that rates in the state are some of the lowest in the country. South Carolina has the second lowest car insurance premiums of any state, with the average annual cost of car insurance costing just $1,095. Some policies may cost substantially more or less than the state average, but South Carolina remains one of the most affordable states for insurance coverage.

Several factors determine auto insurance rates. Some of the things that affect premiums are driver-specific, such as the age, driving history and credit score of the insured. Other factors are determined by the driving population in a given area. Whenever a company must pay more for claims in a certain state, the cost of the claims must be recovered through premiums. This means that a person’s rates can be affected by the driving of other people in the area regardless of that person’s own claims history. It also means that major weather events can lead to premiums increases for everyone, not just the people whose property was affected.

Although there are dozens of things car insurance companies consider when setting premiums, a few factors make the largest contribution to the cost of annual rates.

Uninsured Motorists

The more drivers operating without insurance in an area, the higher the premiums will be for everyone else. This is because insurance companies lose money paying for claims caused by uninsured drivers. Normally, if someone is at fault for an accident his insurance company will reimburse the not-at-fault insurance company for the claim. If the at-fault driver does not carry insurance, however, the other person’s insurance may not get reimbursed and thus will lose the money.

Many states with poor economies have a high rate of uninsured motorists. The same is also true of some areas on the border that may have a higher incidence of immigration, or states that are very rural. Unfortunately, high insurance premiums are one reason that many people opt not to get insurance, which creates a dangerous cycle of rising premiums and high numbers of uninsured motorists.

South Carolina has a fairly low percentage of drivers without insurance, just 10 percent. Several states are lower than South Carolina in this respect, but many more have percentages twice or nearly three times as high. A relatively low number of uninsured motorists is a primary reason for the low premiums in the state.

DUI Statistics

Drunk drivers also contribute heavily to the cost of auto insurance premiums. Drinking and driving is a leading cause of severe traffic collisions, and the cost of vehicle repair or replacement coupled with medical expenses can quickly cause insurance rates to skyrocket.

In 2009, there were 377 alcohol-related fatalities in South Carolina. This accounts for just under half of all fatal collisions in the state. While such a high percentage of accidents being caused by drunk driving is a harsh statistic, it also shows that there are very few accidents in the area despite the state’s population. California, for example, has nearly triple the quantity of accident fatalities listed for that same year.

Car Insurance Requirements in South Carolina

The coverage required by the state also plays a role when determining insurance premiums from one state to the next. When comparing insurance rates, it’s important to compare policies with similar coverage as some states have higher insurance requirements than others and this can skew the statistics.

South Carolina has relatively high minimum coverage requirements. To register a vehicle, a driver must carry minimum liability with limits of $25,000 for injuries to one person up to $50,000 per accident. Property damage liability must have a minimum of at least $25,000 as well.

Although these limits are fairly high, it’s always a good idea to buy as much liability insurance as you can afford. If an accident causes extensive injuries or damage, the policy limits can quickly be exhausted and the insured driver must pay the remainder out of his pocket. This can lead to lawsuits and even suspended licenses until the claim is paid off.

Depending on his needs, a driver may also wish to purchase full coverage auto insurance. This coverage includes collision and comprehensive, which both pay for damages to the insured vehicle. Without full coverage, the insurance company cannot pay to repair the vehicle that is being insured.

Other coverage available in South Carolina includes uninsured motorist coverage, personal injury protection, rental reimbursement and roadside assistance. Each coverage can be purchased separately and the deductibles and limits can be adjusted to create a budget-friendly insurance policy.

By balancing the cost of insurance against the needed coverage, a person can ensure that he has the best coverage for the lowest cost possible. You can find the best rates for South Carolina auto insurance by getting a free quote online. Once you’ve chosen the best company for your needs, an insurance agent will be happy to customize a policy to your specific situation.