2024 Brings No Relief as Car Insurance Costs Continue to Soar
As drivers brace themselves for another year of escalating car insurance premiums, experts warn that 2024 is unlikely to bring any relief from the financial burden. A recent report from The Zebra reveals that drivers paid an average of $1841 for car insurance in 2023, marking a 5% increase from the previous year. This surge follows a substantial 15% jump between 2022 and 2023, painting a grim picture for consumers already grappling with rising costs.
The factors fueling these relentless increases remain consistent, with inflationary pressures impacting auto repair costs and drivers filing larger insurance claims. Additionally, extreme weather events and a surge in car thefts contribute to the mounting expenses.
Hunter Black, an insurance agent at The Zebra, says, "The record amount of catastrophic weather events over the last few years and the surge in auto claims post-pandemic have significantly impacted insurance carriers' loss ratios. As a result, increasing rates will help them recover these losses."
Increased Insurance Premiums
In 2024, several states are poised to witness significant spikes in car insurance premiums due to various factors. States prone to climate-related disasters have experienced a surge in insurance providers withdrawing or adjusting policies, thereby limiting choices for consumers.
Bankrate estimates the national average cost of full coverage car insurance in 2024 increased by 26% to $2,543, up $529 from a year earlier. That’s six times faster than overall inflation and more than any food item at the grocery store, including eggs, over the past three years.
The make and model of vehicles also largely impact insurance costs, with certain Kia and Hyundai models facing higher theft rates, complicating insurance coverage. "Increased crime rates are going to translate to (paying) a higher premium for your vehicle," David Glawe, NICB president and chief executive, warned last year.
Florida and Louisiana emerge as the top states with the highest annual premiums, averaging over $2,700 per year, a substantial 47% above the national average. Conversely, drivers in Vermont and Idaho enjoy relatively lower premiums, with costs registering 35% below the national average.
Notably, drivers in 19 states now contend with average premiums exceeding $2,000 annually, underscoring the stark regional disparities in insurance expenses and the importance of location in determining insurance affordability.
Strategies for Cost Savings
"Every major car ownership expense except gas is dramatically more expensive than it was just three years ago, including used cars and trucks (+24%) and new cars (+19%)," insurance comparison site Jerry stated. While the outlook may seem bleak, there are proactive steps drivers can take to mitigate the financial strain of escalating insurance premiums.
Shopping around for competitive quotes from multiple providers remains a cornerstone of cost-saving strategies. By comparing offerings from four to five companies, drivers can identify the most favorable policies and reassess their coverage needs every six months.
Exploring insurance discounts and savings opportunities is a great way to reduce premiums. Moreover, policies that incentivize low-risk behaviors, such as AAA membership or completion of senior driving safety classes, offer potential avenues for savings. Telematics programs, which monitor driving habits, can also yield discounts based on individual behavior behind the wheel.