Why Is My Car Insurance So High? (2024)
Rising repair costs, increasing damage from natural disasters, and more severe accidents have led to rising car insurance premiums.
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Written byJulia Taliesin
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Julia Taliesin is an insurance content writer at Insurify. She began her career as a journalist, covering local government and business in Somerville, Mass.
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Edited byEvelyn Pimplaskar
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10+ years in insurance and personal finance content
30+ years in media, PR, and content creation
Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.
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Reviewed byMark Friedlander
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Corporate communications director for Insurance Information Institute
20+ years in insurance and communications
As Director, Corporate Communications for Triple-I, Mark serves as the non-profit’s national spokesperson, sharing information and education on a wide array of insurance issues.
Updated November 21, 2024
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Table of contents
Table of contents
Quick Facts
Car insurance premiums increased 24% in 2023 and will rise another 7% this year, according to Insurify projections.
The make and model of your car can significantly affect the cost of car insurance.
Economic factors, like legal system abuse, contribute to higher premiums for everyone.
Insurance rates soared in 2023 as climate disasters, rising repair costs, and more severe car accidents meant increased claims payouts for insurance companies. Car insurance rates already vary greatly because age, ZIP code, credit history, driving record, and other factors affect auto premiums. Those national and individual factors can lead to more expensive rates.
Right now, U.S. drivers pay an overall monthly average of $154 for car insurance, according to Insurify data. People opting for the cheapest minimum insurance coverage pay as little as $16 per month.
Comparing car insurance quotes from multiple companies could help you find better-than-average insurance rates.
Why car insurance rates are up in 2024
Car insurance rates surged 24% last year, and premiums will rise another 7% in 2024, according to Insurify’s latest reports. Motor vehicle insurance had the highest year-over-year price growth of any category in the March Consumer Price Index report.[1]
Inflation has made everything more expensive. Newer cars are costly to buy and repair due to the rising costs of auto parts and labor. Claim severity has also increased significantly, leading to high payouts for insurers.
Factors that affect your car insurance premium
Car insurance companies base premiums on multiple rating factors, including individual driver profiles — to estimate your risk level — your age, ZIP code, vehicle type, driving record, and more. These are some common factors insurers consider when setting rates.
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Age
More experienced drivers pay lower car insurance rates than young drivers. The crash rate for teen drivers aged 16–19 is nearly four times the rate for drivers 20 and older, according to the Insurance Institute for Highway Safety (IIHS).[2] Crash rates are lowest for people in their 60s, and that’s typically when you get the cheapest rates.
Here’s an example of average monthly quotes for liability-only insurance by age.
Liability Rates by Driver Age
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.
Location
The annual national average for full-coverage car insurance is $2,447, but people in some states pay up to 67% more than that. New York, Nevada, and Florida are the three most expensive states to buy car insurance, according to the latest Insurify auto insurance report.
Factors like population density, regional increases in severe accidents, vehicle theft, vandalism, and damaging weather events can lead to rising rates. Rampant insurance fraud contributed to soaring insurance rates in Florida in 2023.[3]
Where you live in the state and local population density can also affect premiums. In New York, drivers in Staten Island pay an average of $449 monthly for full coverage, while people living in the less densely populated city of Rochester in upstate New York pay $204 per month.
Driving record
Your driving record is one of the most critical factors in determining your car insurance rates. If you have a clean driving record, you’ll likely pay significantly less than drivers with traffic violations or accidents on their records. Car insurance companies tend to charge more if your driving habits indicate you could be a high-risk driver.
Drivers with a DUI pay the highest insurance rates, on average. COUNTRY Financial, the cheapest insurer for drivers with a DUI, charges $26 per month for liability coverage. By comparison, the company charges drivers with a clean record just $16 per month for liability insurance.
Drivers with at-fault accidents experience rate increases of about 26%, according to Insurify data. Depending on your insurance company, you could face a premium surcharge every year when your policy renews, for three to five years. Some insurers offer accident forgiveness coverage for your first car accident.
Speeding tickets can also increase your premium, but how much of a spike you’ll see depends on your overall record, location, and insurance company. The following table shows the average monthly liability-only rates top insurers charge compared to their rates for drivers with clean records.
The below rates are estimated rates current as of: Friday, November 1 at 12:00 PM PDT.
Insurance Company ▲▼ | Clean Driving Record ▲▼ | With Speeding Ticket ▲▼ | With At-Fault Accident ▲▼ | With DUI ▲▼ |
|---|---|---|---|---|
| COUNTRY Financial | $16 | $20 | $22 | $26 |
| NJM | $29 | $42 | $45 | $40 |
| Auto-Owners | $34 | $42 | $44 | $56 |
| USAA | $45 | $54 | $57 | $74 |
| Erie | $50 | $63 | $67 | $82 |
| GEICO | $54 | $65 | $69 | $89 |
| State Farm | $54 | $63 | $68 | $89 |
| Mile Auto | $56 | $68 | $75 | $92 |
| Root | $60 | $83 | $88 | $78 |
| Allstate | $61 | $73 | $78 | $101 |
| Metromile | $63 | $85 | $89 | $104 |
| American Family | $73 | $88 | $93 | $120 |
| Mercury | $82 | $113 | $120 | $115 |
| Safeco | $82 | $101 | $102 | $116 |
| Nationwide | $83 | $101 | $108 | $137 |
| CSAA | $84 | $105 | $115 | $111 |
| National General | $86 | $104 | $109 | $142 |
| Travelers | $89 | $108 | $115 | $147 |
| Dairyland | $91 | $109 | $113 | $150 |
| State Auto | $93 | $130 | $140 | $153 |
| The Hartford | $95 | $140 | $148 | $132 |
| Direct Auto | $97 | $116 | $129 | $160 |
| Progressive | $98 | $115 | $126 | $162 |
| Clearcover | $102 | $124 | $151 | $168 |
| Commonwealth Casualty | $110 | $153 | $134 | $181 |
| Chubb | $110 | $136 | $141 | $181 |
| Farmers | $110 | $130 | $139 | $181 |
| Shelter | $111 | $144 | $154 | $183 |
| The General | $112 | $139 | $148 | $185 |
| 21st Century | $112 | $144 | $150 | $185 |
| Foremost | $117 | $163 | $170 | $193 |
| Bristol West | $118 | $143 | $150 | $195 |
| Elephant | $124 | $173 | $151 | $204 |
| GAINSCO | $125 | $174 | $145 | $206 |
| Amica | $151 | $213 | $226 | $203 |
| Liberty Mutual | $159 | $222 | $230 | $262 |
| AssuranceAmerica | $163 | $194 | $198 | $269 |
| Infinity | $181 | $232 | $220 | $298 |
| Hugo | $227 | $262 | $329 | $374 |
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers and quote estimates from Quadrant Information Services. Actual quotes may vary based on the policy buyer's unique driver profile.
Make and model of your car
The car you drive can affect your auto insurance rates significantly. Insurers consider car and repair costs, risk of theft, and overall safety when quoting premiums, according to the Insurance Information Institute (Triple-I).
For example, theft rates and repair costs are higher for luxury vehicles compared to those for a modest sedan, according to Triple-I. A luxury vehicle may also be more likely to be the target of vehicle thieves.
Insurers also consider safety when setting rates. The Insurance Institute for Highway Safety named the Subaru Forester and Outback Top Safety Picks in 2023, and those cars are the cheapest to insure, Insurify data shows.
Choosing a safe, reasonably priced, and easily repaired vehicle can help reduce your premium. Right now, these are the 10 cheapest cars to insure.
Vehicle Make and Model ▲▼ | Average Monthly Quote: Full Coverage ▲▼ |
|---|---|
| Subaru Forester | $147 |
| Subaru Outback | $151 |
| Honda Odyssey | $155 |
| Dodge Grand Caravan | $158 |
| Toyota Sienna | $160 |
| Honda CR-V | $160 |
| Ford Ranger | $163 |
| Chevrolet Trailblazer | $164 |
| Jeep Liberty | $164 |
| Hyundai Santa Fe | $166 |
Economic factors leading to higher car insurance rates
Auto insurance companies continue experiencing multi-billion-dollar losses, which peaked in 2022 and dropped slightly in 2023, global credit rating agency AM Best reports. Many insurers increased premiums at the expense of customer satisfaction, according to consumer insights agency J.D. Power.
Numerous reasons, from rising vehicle prices to costly natural disasters, are behind these losses and higher rates.
High maintenance and repair costs
Rising repair costs have affected insurance rates significantly, but several elements are contributing to those costs.
Though auto insurance claim frequency has decreased since the pandemic, claim severity has increased dramatically, according to Triple-I. That’s at least partially due to changing driving patterns, including more incidences of distracted driving.
Cars are more expensive to repair due to the rising cost of auto parts and labor, Triple-I says. The sensors and cameras in newer vehicles can complicate what might have been a simple repair before. The average estimate for a drivable, front-end claim in 2022 was $3,706, up 39.4% from 2019, according to insurance industry analyst CCC. It costs about $1,000 less to repair the same damage in vehicles more than 7 years old.
Expensive car prices
The average price for new cars reached a 10-year peak in December 2022, but vehicle affordability is improving, according to industry analyst Cox Automotive. Prices dropped by 2.2% year-over-year in February, Kelley Blue Book says.
The number of median weeks of income needed to purchase the average new car declined by 6.2% in March to 36.9 weeks, according to Cox Automotive. Prices remain unaffordable for many consumers, and low used-vehicle stock further limits affordable options, according to KBB.
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Learn More: How Much Will Insurance Pay for a Totaled Car?
Costly climate catastrophes
Changing weather patterns and population growth in vulnerable areas are costing insurers billions.
U.S. insurance companies covered a record $60 billion in losses from strong winds, heavy rain, hail, and tornadoes in 2023, according to reinsurance broker Gallagher Re. The U.S. experienced 26 “billion-dollar disaster events” in 2023 related to storms.[4]
Claims related to severe weather have led to major insurers raising prices, pulling back coverage, denying renewals, or ceasing sales, especially in high-risk states like Florida, Louisiana, and California.
Legal system abuse
In some states, policyholders and their attorneys may abuse the legal system by intentionally increasing the time and cost of claims settlements, according to Triple-I. That contributes to rising costs for all consumers.
While insurance system abuse can include illegal actions, laws in some states make it easier to take advantage. Since 2019, 10 insurers who sold policies in Florida became insolvent due to the high cost of excessive litigation, according to Triple-I. Florida passed laws to reduce legal system abuse last year, and the state’s Department of Insurance has approved at least 15 new insurers to do business in the state since then.
Recent quotes for other Insurify users
Insurify’s drivers have found rates ranging from $42/mo. to $107/mo. in the last few days
*Quotes generated for Insurify users within the last 10 days. Last updated on November 21, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from November 21, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
*Quotes generated for Insurify users within the last 10 days. Last updated on November 21, 2024
Rates shown are real-time Insurify user quotes from 100+ insurance companies and Quadrant Information Services data. Insurify’s algorithm excludes anomalous quotes and anonymizes personal details, then displays refined quotes by price, date, and insurer popularity up to 10 days ago from November 21, 2024. Actual quotes may vary based on the policy buyer’s unique driver profile.
How to lower your car insurance rate
Applying for discounts, paying your full premium up front, and increasing your deductible can help lower your rate. The following steps also could help you save a lot over time:
Maintain a clean driving record
Practice safe driving habits and avoid speeding, tailgating, and hard braking. A clean driving record is the most effective way to get lower rates.
Bundle insurance policies
If you purchase home or renters insurance in addition to auto insurance, bundling policies can save you a lot of money.
Improve your credit score
Auto insurers in most states use credit history to predict your likelihood of filing claims, so having a higher credit score can secure lower premiums.
Compare car insurance
Shopping around will help you find the best car insurance quote, especially as your needs change.
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Keep Reading: The 10 Best and Worst Car Insurance Comparison Sites
Why car insurance is so expensive FAQs
Car insurance is an important investment but can be a significant expense. This additional information can help you understand how insurers calculate premiums so you can save money.
How much will auto insurance prices rise this year?
Insurify’s latest projections predict a 7% increase in auto insurance premiums. National, regional, and individual factors affect premiums, so you may see a more or less significant increase in your rate.
Why does car insurance cost so much?
Large-scale factors, like inflation and severe weather, and individual factors, like age and driving record, affect rates. Good news: Comparing car insurance from different companies can help you find the best policy for your location and lifestyle.
Does car insurance ever get cheaper?
Economic factors can be unpredictable, but you have ways to save. For example, car insurance gets cheaper as you get older and gain driving experience. People with a clean driving record and excellent credit can also get low rates.
Does credit score affect car insurance?
Auto insurers don’t consider your credit score, but in most states, companies can consider your credit history. Insurers use information from your credit record to generate a credit-based insurance score, which they rely on to predict your likelihood of filing a claim.
California, Hawaii, Maryland, Massachusetts, Michigan, Nevada, Oregon, and Utah either restrict or limit using credit history to determine premiums.
Methodology
Insurify data scientists analyzed more than 90 million quotes served to car insurance applicants in Insurify’s proprietary database to calculate the premium averages displayed on this page. These premiums are real quotes that come directly from Insurify’s 50+ partner insurance companies in all 50 states and Washington, D.C. Quote averages represent the median price for a quote across the given coverage level, driver subset, and geographic area.
Unless otherwise specified, quoted rates reflect the average cost for drivers between 20 and 70 years old with a clean driving record and average or better credit (a credit score of 600 or higher).
Liability-only premium averages correspond to policies with the following coverage limits:
- Bodily injury limits between state-minimum rates and $50,000 per person, $100,000 per accident
- Property damage limits between $10,000 and $50,000
- No additional coverage
- Comprehensive coverage with a $1,000 deductible
- Collision coverage with a $1,000 deductible
Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Services’ database of auto insurance rates.
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- The 10 Best and Worst Car Insurance Comparison Sites
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Sources
- U.S. Bureau of Labor Statistics. "Consumer Price Index - March 2024."
- Insurance Institute for Highway Safety. "Teenagers."
- National Insurance Crime Bureau. "Florida Lawmakers Pass Bill to Stop Auto Glass Fraud."
- National Centers for Environmental Information. "Billion-Dollar Weather and Climate Disasters."
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Julia TaliesinInsurance Content Writer
Julia Taliesin is an insurance content writer at Insurify. She began her career as a journalist, covering local government and business in Somerville, Mass. She reported multiple investigative stories about municipal finances and budget allocation, building development and inspection, and personnel. When the pandemic began she became a de facto public health reporter, writing daily and weekly reports using available data to quickly communicate rates of infection and city response.
She's worked for print and digital outlets, writing everything from quick-hit breaking news to long-form community features. More recently, Julia managed content strategy at a startup creating a social platform for licensed nurses, overseeing a team of nurse freelancers and editing interview transcripts and news articles for publication.
She holds a Bachelor's degree in communications from Simmons University, with a focus in journalism. Outside of work, Julia enjoys working on crafting projects, learning about homesteading, and singing in cover bands.
10+ years in insurance and personal finance content
30+ years in media, PR, and content creation
Evelyn leads Insurify’s content team. She’s passionate about creating empowering content to help people transform their financial lives and make sound insurance-buying decisions.
Featured in
Corporate communications director for Insurance Information Institute
20+ years in insurance and communications
As Director, Corporate Communications for Triple-I, Mark serves as the non-profit’s national spokesperson, sharing information and education on a wide array of insurance issues.
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