The answer to this question is quite simple. There are really three major factors.
The most obvious factor is that some states simply have a higher rate of accident for one reason or another.
For example, New Jersey is extremely congested, and because there are more cars on the road, there is a higher chance of accident. But congested states aren’t the only ones with high accident rates. Some states with high deer populations or other animal wildlife may have high rates of automobile damage, which will cause the insurance companies to build these factors into the price of your car insurance.
Another reason for the difference between states is that some states require different kinds of coverage for your car insurance. Some states even require comprehensive car insurance while others just set liability minimums. A state which requires comprehensive car insurance will of course automatically mean a more expensive premium to be paid by car owners in that region.
Another reason for the difference in car insurance premium between states is tax. As you well know taxes always comes into the equation. Two states with the same liability minimums still might have different minimum premiums offered by the same car insurance company because of the difference in tax. Car owners who live in the state with lower taxes will of course have a slightly lower premium since the taxes to be added on top of the actual premium that goes to the car insurance company is lower.
Although you are constrained by the minimum requirements set by your state it does dictate the amount of premium you’ll have to pay for car insurance in each state. You can always opt for a higher premium, which is almost always a good idea because a higher premium means better coverage.
Before you take out a car insurance policy in whatever state you are in it is always a good idea to do some research first, especially if your budget is a little tight. If you are wondering why the policy a certain car insurance company is offering you is quite expensive then don’t just automatically assume that it’s because of state regulations and taxes. Your hunch just might be right and they might be offering you a car insurance policy that has a better coverage, and thus a higher premium, than what is required by the law. Of course as mentioned earlier better coverage is always good, that is unless you were mislead into taking it. Do some research find out the liability minimum set by your state, which is usually a set of three figures like 20/40/15. This means that you need coverage of at least $20,000 for injuries (per person) that arise from accidents that are your fault, $40,000 at least for combined damages, and at least $15,000 for any damages to property that you may cause. After you find out the liability minimum then ask your car insurance firm to give you a policy that covers the liability minimum at the least unless of course you choose a policy with better coverage.