2024 Inflation-Adjusted Auto Insurance: $4 More a Month (at Least)!

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Dec 28, 2023, 10:04 ET

TAMPA, Fla., Dec. 28, 2023 /PRNewswire/ -- AutoInsurance.org recently published a guide about rising auto insurance rates every year. This guide reveals that insurance rates have been rising, and according to experts, they're expected to get more expensive in 2024.

Adjusted for inflation, the average premium for full coverage would increase by $4, but additional factors could result in more significant increases.

Inflation and Auto Insurance Premiums

One driving factor of higher rates is inflation. Even though inflation is not at the record levels of a few months ago, it's still more than 3% over last year, which is high. Insurance companies deal with the effects when they pay claims that cost more than they did five years ago. Additionally, higher overhead costs cut into the profits necessary to remain in business.

Customers absorb the impact of these higher costs through higher premiums.

If inflation was the only factor in rising insurance premiums, someone paying $125 monthly in January of 2023 could expect to pay $129 monthly for the same policy. But there are more factors at play than inflation.

Driving Record Causes Higher Insurance Rates

A person's driving record gives insurance companies information that raises or lowers their risk. Someone with a history of traffic violations or accidents is statistically more likely to file an insurance claim. So, policyholders who added infractions to their records in 2023 can expect higher premiums in 2024.

Melanie Musson, a nationally recognized auto insurance expert with AutoInsurance.org, reminds insurance customers, "The best action a driver can take to keep auto insurance affordable is to keep a good driving record and a claims-free insurance history."

Vehicle Make and Model Factor Into Premiums

According to AutoInsurance.org, the make and model of the insured vehicle impact the insurance premiums. Drivers who purchase a car in 2024 should anticipate insurance premiums reflecting the risks of the new vehicle.

Generally, less expensive and safer vehicles cost less to insure, while sporty cars and luxury vehicles cost more.

Saving Money Despite Rising Insurance Costs

AutoInsurance.org provides readers with tips to save money despite rising rates. The proven strategies include maintaining a good driving record, increasing deductibles, reducing coverage, improving credit scores, and shopping around for coverage.

Read AutoInsurance.org's entire report here: Is it normal for auto insurance to go up every year?

SOURCE AutoInsurance.org