Why northern New England sits near the bottom of the price charts

Maine, Vermont and New Hampshire are cheap mainly because their drivers file far fewer injury claims per insured car, not because their claims are cheaper or their coverage is skimpier. In the National Association of Insurance Commissioners' (NAIC) data for 2023, bodily injury claims ran at roughly 0.33 to 0.40 per 100 insured cars in the three states against 0.82 nationally, while the average cost of each claim was close to the national average. Fewer claims is what a thin, rural road network and light traffic would predict, but other popular explanations hold up less well.

The three states are also not a single block. Maine has been first or second cheapest in every year from 2019 to 2023, Vermont has ranked between fifth and tenth cheapest, and New Hampshire sits in the cheaper third, not at the bottom. This article tests each common explanation against published numbers and flags where the evidence runs out.

What the rankings actually say

The NAIC's 2022/2023 Auto Insurance Database Report gives each state an average expenditure: all liability, collision and comprehensive premium divided by insured vehicles with liability coverage. The countrywide average for 2023 was $1,281.92 (NAIC Auto Insurance Database Report). Ranking the 50 states and D.C. from cheapest to most expensive, using our reading of the report's Table 4:

North Dakota was cheapest in 2020 through 2023. So "year after year" is a fair description for Maine, a looser one for Vermont, and an overstatement for New Hampshire, which sits about $130 below the median state in 2023 (the median was $1,114). The three states also lived through the same price surge as everyone else: between 2019 and 2023 Maine's average rose about 23%, Vermont's and New Hampshire's about 14%, against about 19% countrywide. Cheap relative to other states is not the same as cheap or stable in absolute terms. See our guide to What NAIC auto insurance data measures for how these averages are built and the most and least expensive states for car insurance for the other end.

Where the gap comes from: liability, not the car

Before testing explanations, find out which part of the premium is unusually low. The NAIC publishes average premiums by coverage. Here is the 2023 gap between each state and the countrywide combined average of $1,438.60:

The pattern is consistent: liability is the main source of the gap, in Vermont roughly three quarters of it. Collision runs 16% to 27% below the national average and comprehensive 20% to 34% below. So whatever makes these states cheap, it works mostly through injuries to other people and damage to their property, and only somewhat through damage to your own car.

Test one: fewer claims, not cheaper claims

The NAIC's loss tables for 2022 report claim frequency (claims per 100 car-years) and severity (average cost per claim) by state.

Severity is within 14% of the national figure in all three states, and New Hampshire's is higher. Frequency is less than half the national rate in all three. The pure premium (what claims cost per insured car-year) follows frequency, not severity. Property damage liability tells a similar story, with frequency of 2.25 to 2.58 claims per 100 car-years against 2.84 nationally and lower severity ($5,385 to $5,642 against $6,790). This is the single most useful fact in the article: the explanation has to be about how often claims occur. Our article on claim frequency vs severity: which one actually moves premiums? explains why frequency and severity are priced differently.

Test two: density and miles driven

Fewer cars per mile of road should mean fewer collisions between cars. The NAIC report publishes two density indicators from outside sources. The 2020 Census share of residents living in urban areas was 38.6% in Maine, 35.1% in Vermont and 58.3% in New Hampshire. Federal Highway Administration data for 2022 give vehicle miles driven per mile of roadway: 0.64 million in Maine, 0.50 million in Vermont and 0.82 million in New Hampshire. For comparison, the table lists 1.94 for New Jersey, 1.84 for Florida and 1.73 for California.

Density comes closest to explaining the pattern. The NAIC states that high-premium states tend to be highly urban, with heavier traffic, and the three northern states are among the least urban in the country. The limits of this explanation are real, though. New Hampshire's traffic measure (0.82) is the same as Pennsylvania's (0.82) and close to Louisiana's (0.86), yet their 2023 averages were $1,154.57 and $1,754.03 against New Hampshire's $986.84. Density is a partial answer, which fits the NAIC's own warning that no single variable explains the state differences. For the dense end of the map, see Why dense Northeast and Mid-Atlantic states cost more to insure.

Test three: the rules about buying insurance

New Hampshire is the obvious case for a "mandate" explanation, because it is the one state of the three that does not require drivers to buy liability insurance. Under New Hampshire's financial responsibility statute, the law is triggered by events such as a serious conviction or a crash, and a person can be required to prove future responsibility. Policies sold for private passenger cars must include medical payments coverage of at least $1,000 per person (N.H. RSA chapter 264). The NAIC report likewise notes that New Hampshire is not a compulsory state and that policies that are purchased carry 25/50/25 limits. Our articles on Financial responsibility vs mandatory insurance: New Hampshire and States without a true mandate: New Hampshire and Virginia's old fee cover how that works in practice.

Maine and Vermont do require insurance. As of October 2022 the III's summary of state laws listed Maine at 50/100/25 liability limits plus uninsured and underinsured motorist coverage, with medical payments required (the NAIC report puts it at $2,000), and Vermont at 25/50/10 with uninsured and underinsured motorist coverage (III uninsured motorist statistics). Check current limits with the state car insurance requirements lookup tool or each state's regulator, since minimums change.

Do the mandates explain the prices? The numbers say no. Bodily injury frequency is similar in all three states (0.33 to 0.40), regardless of whether the state requires coverage. Maine's higher liability limits do not make it more expensive than Vermont or New Hampshire; its liability premium is between the two. The Insurance Research Council estimates for 2023 put the share of uninsured drivers at 5.7% in Maine (the lowest in the country), 10.0% in New Hampshire and 11.8% in Vermont, against 15.4% nationally (III summary of the 2025 IRC study). New Hampshire's rate with no mandate is lower than Vermont's with one. Requirements matter for individual drivers, but they do not appear to separate these states.

Test four: weather and animals

Weather and wildlife are the standard counter-argument: cold winters, ice, snow and deer should push claims up. The data suggest they raise the cost of physical damage coverage but not enough to erase the gap. Comprehensive premiums, which pay for animal strikes along with theft, glass and storm damage, are 20% to 34% below the national average in the three states. Vermont's, at $191.41, is the highest of the three.

Animals are a real cost, though not necessarily a larger one than elsewhere. State Farm's 2025 release, covering claims from July 2024 to June 2025, puts the national odds of an animal collision claim at 1 in 139 and names West Virginia (1 in 40), Montana (1 in 53), Wisconsin (1 in 58), Michigan (1 in 61) and Pennsylvania (1 in 62) as the first five of its ranking, so none of the three northern states are at the top (State Farm newsroom, September 2025). We did not find State Farm's figures for Maine, Vermont or New Hampshire, so we do not quote odds for them. In Maine, the state transportation department counted 287 car-moose crashes in 2017, down from nearly 650 a decade earlier, according to Maine Public.

The takeaway: wildlife and winter are offsetting costs in these states, visible in collision and comprehensive premiums that are cheaper but not rock-bottom, and the liability side is where the big gap lies.

Test five: market competition and regulation

Rate regulation is the next suspect. The NAIC's rate-filing table lists Maine and New Hampshire as file-and-use states and Vermont as use-and-file, in which insurers may change prices without waiting for advance approval, while Michigan and Pennsylvania are prior-approval states. See file-and-use for the definition and prior approval vs file-and-use: do regulated states pay more or less? for the debate about whether this changes prices. The pattern is not a clean one: Louisiana, Maryland, Colorado and Texas are also listed as file-and-use and are among the pricier states, while North Dakota, the cheapest in 2023, is a prior-approval state. We do not treat the filing system as an explanation.

We also looked for market-concentration data for the three states, and could not verify a state-level comparison, so we make no claim that regional insurers or lighter competition lower prices. The mechanism would be plausible, as small mutuals can price to a stable local book, but a plausible mechanism is not evidence.

What the rankings hide: income and what is being insured

A low rank can mean low risk, or a low-income population buying less coverage, or both. Two caveats apply.

Income. The NAIC report shows 2022 disposable income per capita of $53,011 in Maine, $54,922 in Vermont and $64,666 in New Hampshire, against $42,170 in Mississippi and $76,603 in D.C. A crude ratio of the 2023 average expenditure to that income gives about 1.6% in Maine and Vermont and 1.5% in New Hampshire, against about 3.3% in Florida and 3.5% in Louisiana (our arithmetic, mixing a per-vehicle premium with a per-person income, so use it as an illustration, not a standard measure). On that view the three states are inexpensive both in dollars and relative to income. Our piece on car insurance affordability by state: premium as a share of income makes the proper comparison.

What gets insured. Average expenditure divides total premium by vehicles with liability coverage, so it shifts when people drop collision or comprehensive. Older, lower-value cars are often insured with liability only, which pulls the average down without any change in how risky the roads are. The NAIC lists the types and amounts of coverage purchased among the factors behind state differences. We did not find state vehicle-age data to measure this, so treat it as a caveat, not a finding.

A worked example: shopping with the rankings in mind

Say you are comparing two quotes, one from a northern New England address and one from a state near the national median, for the same driver, car and limits. Here is how to use what the numbers show:

1. Compare identical coverage. The state averages mix coverage choices; your quotes should not. Match liability limits, deductibles, uninsured motorist coverage and medical payments.
2. Look at the liability line first. If the quote gap is mostly in liability, it fits the state-level pattern. If it is mostly in collision and comprehensive, check the vehicle and deductible.
3. Ask how the garaging address is rated. In states that allow territory rating, a few miles can change the price; the rural Maine, Vermont or New Hampshire location may be in a cheaper territory than a nearby town.
4. Do not drop coverage because the state is cheap. A low-frequency state still has severe claims: Maine's average bodily injury claim in 2022 was $25,769 and New Hampshire's $31,286, so an average claim can reach a $25,000 per-person limit, and many claims are well above average.
5. Re-shop yearly. Maine rose about 23% over 2019 to 2023 in the NAIC data, faster than the nation.

Common questions

Is New Hampshire cheap because insurance is optional there?

The data do not support that. New Hampshire's bodily injury claim frequency (0.37 per 100 car-years) is close to Maine's (0.40) and Vermont's (0.33), and both of those states require insurance. New Hampshire ranks about sixteenth cheapest, behind Maine and Vermont.

Does the lowest-premium state have the safest drivers?

Not necessarily. Lower claim frequency can reflect fewer cars per mile of road, less congestion and shorter trips as well as driver behavior, and the NAIC cautions that its tables cannot isolate causes.

Will my rate stay low if I live in one of these states?

Not automatically. Your premium depends on your record, car, coverage, credit-based score where the state allows it, and your insurer's own filings. The state average is a starting point.

Where can I check a rate in my state?

Start with the state insurance regulator: Maine's Bureau of Insurance, the Vermont Department of Financial Regulation and the New Hampshire Insurance Department publish consumer information and handle complaints. For a quote, compare at least three insurers on matching coverage.

Key takeaways

• Maine, Vermont and New Hampshire are cheap because of low claim frequency: bodily injury claims run at 0.33 to 0.40 per 100 car-years against 0.82 nationally, while claim severity is near the national average.
• Most of each state's gap to the national premium sits in liability coverage, about 61% to 74% of it.
• Density and light traffic fit the pattern best; insurance mandates, rate-filing rules and uninsured-driver rates do not separate these states from one another.
• The three states are not identical: Maine ranked first or second cheapest every year from 2019 to 2023, Vermont fifth to tenth, and New Hampshire fifteenth to seventeenth.
• A low ranking does not remove the need for adequate liability limits, and prices in these states rose between 2019 and 2023 too.