Here's Why Your Car Insurance Has Become More Expensive
Millions of vehicle owners have been shocked when opening their most recent auto insurance bills. Rates are up across the board, hitting $2,543 in 2024, which represents a 26 percent increase from 2023. CNBC and Bankrate reported on the rate increase, noting that some states and drivers have it much worse than others.
The reports found that Americans are spending 3.41 percent of their incomes on car insurance, reaching an average of $212 per month for full coverage insurance. Drivers in Louisiana spent the most on coverage as a percentage of their income, while people in Massachusetts paid the lowest percentage.
What’s causing the jump in insurance rates nationwide? A few factors have aligned, including longer repair times, more expensive parts, higher-priced rental cars, and more. Cars in general are also becoming more costly to fix. There have been plenty of stories of high-priced Tesla and Rivian repairs, but even gas vehicles can be ridiculous because of the tech and materials employed in production.
The rise in car thefts, including of Kias and Hyundais, has also played a role in the price increases. Urban areas, where it was already more expensive to insure a car, have seen jumps in crime, and insurers charge extra when they view a situation as risky.
Of course, all of these factors ignore the most important things insurers use to determine car insurance rates: You. Your age, driving record, credit, and many other factors play a hugely significant role in determining what you pay for car insurance. If you drive like a maniac and have accumulated several speeding tickets, higher insurance rates should come as no surprise.
[Image: Photo Spirit via Shutterstock]
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Chris grew up in, under, and around cars, but took the long way around to becoming an automotive writer. After a career in technology consulting and a trip through business school, Chris began writing about the automotive industry as a way to reconnect with his passion and get behind the wheel of a new car every week. He focuses on taking complex industry stories and making them digestible by any reader. Just don’t expect him to stay away from high-mileage Porsches.
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Odd that the article doesn't mention one of the biggest reasons for rising premiums (particularly in states like Louisiana and Florida) - the increase in losses by insurance/reinsurance companies due to the increase in Billion dollar extreme weather events.
This also holds true for home insurance premiums.
Also the article does not mention that many manufactures (looking at you GM) are reporting your driving habits to LexisNexis and insurers are rating your policy on that information too.