The most and least expensive cities for car insurance

In many cities, owning a car is the key to freedom. In others, the cost of ownership is reason enough to ride the bus.

Apart from the price of gas and an occasional bill from the mechanic, insurance premiums are often the biggest expense drivers have to factor into their budgets. Though many variables can affect the cost of insurance—a driver's age, the severity and number of dings on their record, and the make and model of the car itself—where a person lives can be the biggest deciding factor of all.

"Insurers know you are statistically more likely to make a claim if you live in certain areas," said Laura Adams, an analyst for InsuranceQuotes.com. "These areas tend to have higher population density, more congestion [and] more traffic. Some of them also have more expensive cars on the road, which often means higher theft and more vandalism."

In a new study by InsuranceQuotes.com, the online price comparison tool plugged in various customer profiles across the 25 largest U.S. metropolitan areas. It then averaged the results to determine where car insurance premiums cost drivers the most.

Click ahead to see the most and least expensive states for car insurance.

—By CNBC's Robert Ferris
Posted 11 Sept. 2014

Comparisons are based off data from the National Association of Insurance Commissioners, which found that on average, people across the U.S. pay $797 a year for insurance.

165% higher than the national average

Detroit drivers have to shell out significantly more for insurance premiums, thanks in part to a few factors.

First, Michigan is a "no-fault" insurance state, meaning insurance companies have to pay out personal injury claims to policyholders when they are victims in accidents, rather than requiring victims to pursue damages from the company insuring the driver who caused the accident.

It is also the only state in the U.S. that has unlimited personal injury protection; most states cap the amount of money a company has to pay out.

Finally, Detroit is home to a large number of drivers who don't have insurance—meaning those who do have it are saddled with making up the difference, according to the report.

36% higher than the national average

The New York area includes all five boroughs and extends into surrounding counties and parts of New Jersey, Connecticut and Pennsylvania. Its population density, congestion and traffic all drive up the price of claims, with commuters also playing a big role.

Although public transportation is widely used in the city, some commuters do drive cars. Because people who commute are likely to put more miles on their machine, they're also more likely to file a claim.

"That is why, if you only drive between 10,000 and 15,000 miles per year, you can get huge discounts from your insurer," Adams said.

34% higher than the national average

The number of people in the area, traffic and congestion all contributed to higher rates in Miami. Other factors include the number of expensive cars on the road, a high crime rate in parts of the city, and the fact that Florida is a "no-fault" insurance state.

25% higher than the national average

Like Miami, population, congestion and traffic all contribute to L.A. being one of the most expensive cities for car insurance.

In an earlier study of insurance rates within California alone, InsuranceQuotes.com found rates in the city were exceptionally high compared with the rest of the state. There were also huge disparities within the L.A. metro area itself. Beverly Hills was the most expensive, likely because of the average price of cars in the elite neighborhood.

17% higher than the national average

The least expensive of the most expensive, traffic in the Atlanta area is not quite as heavy as it is in L.A., and the city is a bit more spread out, Adams said. But it's still a growing urban area with a number of wealthy ZIP codes, and a few neighborhoods with very high crime rates.

16% lower than the national average

Despite being known for its above average crime rate, the Windy City ranked as one of InsuranceQuotes.com's most affordable cities for insurance. The region likely got a boost from its inclusion of parts of Wisconsin and Indiana in the analysis.

18% lower than the national average

Adams did not have any insight into why St. Louis was one of the cheaper cities, but car insurance in Missouri overall is cheaper than it is in much of the rest of the country, according to a separate report by Auto Insurance Specialists. In fact, St. Louis is pretty expensive compared with much of the rest of the state, according to the report.

24% lower than the national average

Pennsylvania is one of only three states that offers optional "no-fault" coverage. The city's lower population density also may contribute to lower rates, Adams said.

31% lower than the national average

"Cleveland is just not as crowded," Adams said. "It's a spread out metropolitan area, and you just don't have the congestion that you have in other cities."

43% lower than the national average

This North Carolina city has a lower population density, but it also has one trait that makes it much cheaper than any other on the list: The state's insurance industry is very tightly regulated, making it difficult for insurers to hike rates, Adams said.

"This means that insurers raise rates where they can," she said, adding that may mean policyholders in other states are picking up the slack.