The average annual insurance rate in Rhode Island is $1735. This is $239 higher than the national average insurance rate. The average rates increase twofold in certain cases, one of them being accidents on your driving record. In Rhode Island, Woonsocket is the cheapest city to buy auto insurance. With an annual average rate of $1386, Woonsocket’s rates are lower than the state average by $349. However, if you’ve been involved in an accident in the past three years, your rates could increase between $1733 and $2079.

Insurance companies usually follow the Insurance Services Office’s (ISO) surcharge policy. The following table shows the increase in rates according to this policy in the different cities in Rhode Island.

Accidents involving major property damage or serious medical injuries will cost you even more in terms of insurance costs. In Providence, your insurance costs will increase between $3497 and $4662.

A defensive driving course completion certificate may help reduce your insurance costs. However, this reduction is only marginal, and helps very little in the long run. The defensive driving course is still a good choice, since it helps make you a better driver.  

These figures, obtained from a November 2013 study by the Consumer Federation of America, show that while auto insurance costs more in Rhode Island, there has been some catching up that the state has done in the 21 years ending 2010. However, this is yet to translate into real savings for consumers in the state. Furthermore, when compared to states like California (which saw a decrease in costs of 0.3%) or New Hampshire (where costs went up by only 15.9%), Rhode Island’s performance is left wanting.

The study found that states that implemented stringent auto insurance regulation had the most success in keeping rates from rising too fast. Moreover, they did so without adversely affecting profitability of insurers. The Prior Approval system, which requires insurers to file rates changes and have them approved by the state before being implemented in the marketplace, has been credited with helping keeping rates low. In contrast, Rhode Island employs a File and Use system where insurers are required to file rates changes before use but without any requirement for approval.

Implementing stringent auto insurance regulation in Rhode Island, in particular the PA system, will benefit consumers by bringing rates down to manageable levels. As of 2010 levels, there is a substantial and significant gap in auto insurance costs in Rhode Island and the countrywide average. Stringent regulation will help bridge this gap, as per the study.