Car Insurance Premiums to Increase 12.6% in 2024 - Highest Rate increase in 6 years

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Jan 09, 2024, 11:48 ET

Residents of all 50 States Will See Their Car Insurance Get More Expensive in 2024

NEW YORK, Jan. 9, 2024 /PRNewswire/ -- American drivers should prepare themselves for another year of Auto Insurance sticker shock, with auto insurers expected to raise car insurance premiums by an average of 12.6% in 2024, after raising rates by 11.2% in 2023. This will be the highest rate increase since 2018, according to The State of Auto Insurance in 2024 report published by ValuePenguin.com, a LendingTree subsidiary. The average annual cost of auto insurance will reach $1,984 in 2024, and drivers across all 50 states will see premiums increase.

2024 Auto Insurance Rate Predictions:

Auto insurers will raise premiums by an average of 12.4% in 2024, the highest rate increase over the past six years. The average cost of car insurance has increased 29% overall since 2018.
Every state is expected to see a rate increase of at least 3% this year. Nevada will experience the country's largest auto insurance rate hike in 2024 - an astounding 28% increase over 2023. Washington state (18%), Arizona (17%), Connecticut (17%), Louisiana (16%) and Georgia (16%) drivers can also expect substantial increases in their auto insurance premiums in 2024.
The average cost of full coverage car insurance in 2024 will be $1,984/year, with Michigan, Florida and Nevada residents paying the highest average premiums, and Maine, New Hampshire and Idaho residents paying the lowest average premiums.
Drivers with traffic violations will see their premiums jump 52% on average, with drivers in North Carolina, California and Hawaii facing the stiffest financial penalties - an increase of over 90% for traffic violations and dangerous driving.
Insuring electric vehicles is getting cheaper in 2024, but insurance for new EVs will still be 23% higher than new gasoline-powered cars. Tesla's Model X, Model 3 and Model Y have the highest insurance premiums in 2024 while the Honda CR-V and Ford F-150 are the cheapest cars to insure in 2024.

As auto insurance premiums continue to rise, 54% of Americans report they're struggling to afford auto insurance. Divya Sangameshwar, an insurance expert at ValuePenguin.com says the struggle will worsen for millions of Americans in 2024. This year's auto insurance rate increase will be even higher than 2023." She adds, "While Americans will likely feel the pinch across the board, Gen Z drivers will be hit the hardest in terms of insurance affordability. With these insurance rate adjustments, the country's youngest drivers will pay 188% more for car insurance than their older peers in 2024."

What are the driving forces behind these rate hikes? While inflation has started to slow down, cars continue to be more expensive to repair or replace. Last year also brought substantial severe weather that drove up the number of claims for insurers. As the U.S. faces more extreme weather over time, car insurance rates will increase to match the higher risk that weather poses. The rise in car thefts since 2022, including the 700% increase in catalytic converter thefts since 2019 are also contributing to higher insurance costs. .

Full State of Auto Insurance 2024 Report: https://www.valuepenguin.com/state-of-auto-insurance-2024

Tips To Save On Your Auto Insurance in 2024

Compare insurance quotes: 68% of auto insurance policyholders shopped around to find the best rate and saved an average of $398 a year on their auto insurance premiums in 2023 — which is why comparison shopping will continue to be one of the best ways to save money on auto insurance in 2024.
Research discounts: Insurance companies offer many discounts to help you lower your rates, but 1 in 4 Americans believe they don't offer much savings. Bundling your home and auto insurance policies reduce your prices by 18%. And if you agree to install a telematics device in your car you can save as much as 30% on your premiums.
Adjust coverage: Liability-only car insurance is 157% cheaper than full coverage car insurance - a good way to save for those who don't have a vehicle loan or an expensive car. Additionally, removing optional coverage like roadside assistance can bring down car insurance costs. Nearly 1 in 2 Americans reported they're considering this as a way to save in 2024.
Improve credit score: Americans with a poor credit score pay as much as 80% more for car insurance and are 19% more likely to have had trouble affording car insurance. Improving your credit score is a great way to bring down auto insurance costs in 2024.

For additional information on how Americans shop for Auto Insurance, and how to save visit:
https://www.valuepenguin.com/auto-insurance-awareness-study

About ValuePenguin.com:
ValuePenguin.com and its parent company, LendingTree®, have a common mission: to empower consumers with tools, information, and resources to help them make smarter, more informed financial decisions. For more information, please visit www.valuepenguin.com, like our Facebook page or follow us on Twitter @ValuePenguin.

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SOURCE ValuePenguin