North Dakota’s low number of uninsured drivers and spread-out population makes the state’s average monthly auto insurance premium $40 less than the national average. That’s a pretty sweet deal, but it could get even better. With a half-hour of research, you could save thousands on your annual premium.
There are so many factors that influence your premiums that it’s impossible to say one company is the best for everyone. Insurance companies calculate rates by analyzing a lot of different factors that are unique to you: your driving record, your vehicle, your family situation and your credit score. In addition, every insurer has its own proprietary formula for ranking those factors, so the only way to know which provider is going to give you the best car insurance is for you to hit the dirt and compare quotes.
Our Top 5 Picks for the Best Cheap Car Insurance in North Dakota
These five companies have excellent customer service ratings and financial solvency, as well as high ratings from both A.M. Best and J.D. Power. A.M. Best is a top financial-strength rating agency that assesses a company’s long-term stability (which directly impacts how able it will be to pay any claims you file), and J.D. Power surveys customer satisfaction with auto insurers every year (a measure of how horrible or wonderful they’ll be to deal with). High marks from these companies mean you can count on the insurer to make the claims process as painless as possible. No one needs or deserves the hassle of bickering with an insurance company in the heat of the moment.
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North Dakota’s Minimum Coverage Requirements for 2020
North Dakota’s required liability coverage is pretty standard: $25,000 of bodily injury coverage per person and $50,000 per accident, plus $25,000 of property damage liability coverage. North Dakota also requires uninsured and underinsured motorist coverage, both with minimums of $25,000 per person and $50,000 per accident. It’s also one of the few states that requires personal injury protection, which covers medical expenses and loss of income following an accident, regardless of fault. Every driver must carry $30,000 of this type of coverage.
Why are North Dakota’s rates so affordable?
North Dakota’s auto insurance premium costs sit well below the national average, thanks to the state’s low population density and few uninsured drivers. With the population spread out, there’s a smaller chance of collisions and auto theft, which is good news to insurers and, consequently, good news for you.
Less than 7 percent of North Dakota drivers are uninsured, which also helps lower the risk to insurers. In states with a large uninsured population, like Oklahoma, auto insurance providers must build that risk into premiums because there’s a good chance they’re going to end up paying to cover damages caused by an uninsured driver. Without that risk here, insurers are able to offer lower rates.
Do you need no-fault insurance in North Dakota?
As one of the few states that follows a no-fault insurance system, North Dakota requires that drivers in car accidents turn to their own insurance companies for help covering medical expenses, lost wages and repairs to vehicles. However, the state also says that the most you can receive in damages from an accident is $30,000.
Once you have exhausted the money from your own insurance, and you require more compensation, you can bring a lawsuit for liability against the other driver. A judge in North Dakota can make a determination based on non-economic damages, past economic damages, and future economic damages.
Should you get more than the minimum coverage?
The average driver will file a claim for an accident once every 17.9 years. The average disabling, nonfatal injury costs $93,800. If you have only the minimum coverage, and you cause someone an $80,000 injury, you’re going to be left paying a lot out of pocket. Your insurance is going to cover only the $25,000 it’s responsible for, and you’re going to be left with the remaining $55,000 bill. You’re likely to end up being sued for the damages, and the money you’ve put away for a down payment on a house is going to go toward the injured driver’s medical bills instead.
But if you’d purchased higher coverage limits at the start — let’s say $100,000/$200,000/$100,000 — with Geico, you’d pay only $88 more each year. You won’t even miss the extra $7 you’re paying on your monthly premiums, but in an accident like the one described above, it would mean that you wouldn’t have to pay for any damages out of your own pocket. Over the course of those 18 years, you would pay only $1,584, and if you did get into that accident, that would mean you’d save $55,000. So, it seems absolutely worth it.
You may also want to think about adding some vehicle protection. North Dakota law doesn’t require this although your lender might if you have a lease or a loan on the vehicle. There are two types: Collision coverage pays for damages after a crash with another driver, even if you’re at fault; comprehensive coverage deals with claims not involving collisions with another vehicle, including wildlife collisions. Given the high risk of hitting a deer in North Dakota, investing in more than cheap car insurance is a smart move.
What’s the difference between collision and comprehensive insurance coverage?
The two most common types of auto insurance are collision and comprehensive insurance coverages. You would apply collision insurance in the event that you roll your car or that your vehicle collides with another vehicle. Collision coverage is also useful when you hit another object, like a tree or a building, with your vehicle. Finally, collision coverage is useful for damage that is a result of road conditions, such as hitting a pothole.
On the other hand, comprehensive insurance coverage comes into play when an object, such as a tree, falls and damages your car. You can also use comprehensive insurance after an animal collides with your car or after your vehicle is damaged by a fire or other natural disaster, such as hail or a tornado. Finally, comprehensive insurance can be used if your vehicle is either stolen or vandalized.
If you wonder what type of insurance to get, think about the current value of your car, the area where you live and drive, and your driving style. If you are likely to get into an accident or encounter natural disasters, that may inform your decision about which type (or both) of insurance to purchase for your vehicle.
What happens if you don’t have insurance coverage?
Ignoring North Dakota’s auto insurance laws will cost you at least $150. If you’re involved in an accident, you’ll also have 14 points assessed against your license, which is enough to earn you a suspension.
Do you need SR-22 insurance?
If you have never heard of SR-22 insurance, it’s probably because you’re an overall good driver who has never had an encounter that required you to learn about this policy. You would be required to get SR-22 insurance if you have had a string of traffic violations, such as frequent tickets, citations or accidents. You could also be required to pick up SR-22 insurance if you were driving under the influence or if you were found to be driving without car insurance.
If this has happened to you, then you can purchase SR-22 insurance from your regular insurance provider. Because it is a policy with a lot of paperwork that has to be filed in a timely fashion, you will likely face steep premiums to pick up SR-22 insurance. You will be required to maintain the SR-22 insurance until you have proven your good driving and when enough time has passed.
Why You Should Compare Quotes Every Few Years
Insurance providers also consider how likely you are to leave them when calculating your rates. It’s a process called price optimization, and companies use big data to determine if you’d take a higher rate. They analyze your credit score, your online shopping habits and other factors, including how recently you’ve gotten quotes from other companies to measure your loyalty to them. Loyalty should earn you savings, and many companies even give you a loyalty “discount” to make it seem that that’s the case, but it’s not. The less likely you are to shop around, the more you’ll be charged come renewal time; it’s a way for insurers to maximize their profits by capitalizing on complacency.
That’s why it’s best to shop for new coverage at least every year or two, even when you like the company you’re with. When you prove you’re not loyal to any one company, they’ll all offer you more competitive rates in an attempt to gain your business. Your overall risk as a driver also changes over time, so in a year or two, you may find your rates are much lower than they are today anyway.
More than 15 states, including California, Florida and Pennsylvania, have banned price optimization, but North Dakota has yet to respond. For the time being, it’s your responsibility to ensure you’re getting a fair rate, and that means setting aside time here and there to re-evaluate your coverage. Don’t settle for what might seem like cheap auto insurance; go get some quotes, and make sure you’ve got the lowest premiums possible.
This is especially important if you have some specific factors working against your insurance rate. For example, if you have a new driver on your policy, you’ve likely noticed that your premium is high. This is because new drivers, whether they are teenagers or simply people who have just gotten a license for the first time, have no driving record on which to base the premium. This means that insurance companies have no idea whether the new driver will be a good one or not. Bad drivers have more accidents that require insurance payouts, so to protect themselves against the possibility of more payouts, insurance companies raise rates.
The same is potentially true for drivers with poor credit. Companies that run credit checks and see scores below 620 will likely raise your premium. Unless you move to another state, change the vehicle you’re driving, or work to raise your credit score, this number will likely haunt your coverage for the foreseeable future.
However, if you’re a good driver, you may qualify for a good driver discount. Keep your driving record clean without tickets, accidents, or other incidents, and you may see a drop in your premium.
Best Car Insurance in North Dakota
Insurance policies are so personalized, there’s no way to say that one company has the best car insurance out there. Getting quotes and comparing prices and coverage levels is the only way to find the best deal for you.