Average Car Insurance Prices Reach Alarming Heights, Climbing to Almost ,500 Nationwide

Average Car Insurance Prices Reach Alarming Heights, Climbing to Almost $2,500 Nationwide

Car Insurance Premiums Expected to Rise

The average car insurance premium is projected to cost nearly $2,500 this year — almost $1,000 higher than in 2021, when prices bottomed out during the pandemic.

A New Report Reveals the Rise in Car Insurance Premiums

A new report from Insurify, an insurance marketplace, estimates that the average cost for a full coverage auto insurance policy will rise to $2,469 by the end of 2024. That would be a 22% increase over last year, when premiums averaged $2,019.

Comparing Car Insurance Premiums Over the Years

The rise is even more dramatic compared to what drivers were paying for insurance a few years ago. The average cost of full coverage was in the low $1,600s in 2020 and 2022, and it dipped to $1,567 in 2021, according to Insurify data. (You may remember that during the early months of the pandemic, auto insurance prices dropped significantly and some insurers actually gave customers rebates because people were driving so much less.)

Why Car Insurance Prices are Rising so Fast

While prices for most goods rose in the aftermath of the pandemic, costs spiked to a staggering degree for car insurance. Around this time a year ago, Bureau of Labor Statistics (BLS) data indicated that auto insurance rates were increasing faster than any other common expense — up around 17% in a year, compared to general inflation of 3%.

Most Expensive States for Car Insurance

Insurify says that Maryland is the most expensive state for auto insurance, with average full coverage premiums running $3,400 per year as of June.

Here are the 10 states with the most expensive car insurance rates:

What’s Causing the Rise in Car Insurance Premiums

Prices have skyrocketed for a variety of reasons. The most obvious one is that prices for new and used vehicles have surged in the past few years. Cars are much more expensive to repair or replace, and insurers are factoring in rising costs related to customer claims and passing them along to drivers in the form of higher premiums.

How to Lower Your Car Insurance Premiums

To some extent, rising car insurance prices are unavoidable. But there are some classic strategies for lowering car insurance premiums that are worth trying, including raising your deductible and bundling home and auto insurance policies to get a discount. It’s also smart to shop around for cheaper car insurance once a year or so, to see if there are better options.

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