From groceries to mortgage rates, everything seems to cost more in 2024. You can add car insurance to that list.
Car insurance costs have been on the rise this year, leaving drivers paying more and searching for ways to save.
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According to a report fromBankrate, the average annual premium offull-coverage auto insurancerose to $2,543 in 2024 — up 26% from the previous year.
Costs vary from state to state, but a local agent with A-MAX Auto Insurance in Irving said some policies have gone up by 30% in Texas.
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In other states like California and Missouri, coverage premiums went up by more than 40%.
Rates vary from person to person with differing circ*mstances, but on average, agents have been seeing increases happening since last year across many major carriers, as they try to stay up with the rate of inflation.
According to Bankrate, the national average of how much of their income a driver spends on full auto coverage is also up, at 3.41%. But in many states, drivers devote far more of their income towards car insurance. For instance, Floridian drivers spend 5.69% of their income on full coverage auto insurance, Michigan drivers spend 5.01% of their income, and those in Nevada — 4.91%. Louisiana, however, is the state where drivers spend the most of their income, putting 6.53% toward full coverage insurance.
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Besides inflation, the cost of cars has contributed to the higher cost of insurance. The cameras and sensors that are supposed to keep us safe are all more expensive to replace, even if it's just a fender bender.
Insurance companies are also factoring in population density in growing metros like DFW. They're also looking at weather patterns, which have been on the wild side just about anywhere you look in recent years.
Accidents are also a huge factor. Forbes recently ranked Dallas in the top 10 worst cities to drive in as well as one of the most likely places drivers will be involved in a car crash.
The Bankrate study lists the average annual premium in Texas this year at just over $2,600 or roughly $220 a month. That means some families are paying hundreds of dollars more on annual policies for 2024.
"So just like the price of groceries and the cost of living is going up, your insurance rates are going to go up as well," said Jenan Chapman, district sales manager for A-MAX Auto Insurance in Irving. "It is difficult. Obviously, because of what we're getting paid and what our wages are here in Texas, they haven't increased. So it is difficult. Just the overall cost of living in general, everything is hard right now."
Agents say now might be a good time to re-assess and save some money.
- You might have to switch insurance providers to find a better rate for the amount of coverage you need.
- Check with your insurance to see if they're doing a safe driver program. They might send you a device that monitors your speed and overall driving.
- Work on improving your credit score because it lowers your risk assessment by an insurer.
- The type of car you drive might also be costing you more. If your rates are breaking the bank, consider a different vehicle.
- Additionally, keep in mind that having a teenage driver on your policy is just going to be expensive no matter what. Bankrate’s report shows the cost to insure a teen driver in 2024 is 23% higher than last year nationwide.
If your solution is to lower the amount of coverage to get a better rate, experts warn you to think again.
The numbers might look enticing. The report shows the national average cost for full coverage car insurance is $212 per month, compared to just $62 per month for minimum coverage.
However, minimum coverage can leave you financially vulnerable if you’re found at fault in a crash.
FAQs
Projected annual car insurance cost changes for 2024
Drivers could see a total increase of 22% in 2024, with average premiums of $2,469 by the end of the year, according to Insurify data.
Why did my car insurance go up if nothing changed? ›
Why did my car insurance go up when nothing changed? Your car insurance may have increased this year due to various factors, including inflation, higher repair costs and an increase in auto thefts in your area.
Why did my car insurance go up in 2024 in California? ›
“The increases that have occurred have been largely driven by a continuation of people driving more, resulting in an increasing frequency of claims and inflationary pressures related to vehicle prices and repairs,” said Gabriel Sanchez, spokesperson for the state Department of Insurance.
Will car insurance rates go down in 2025? ›
Since 2023, car insurance rates have surged 26%, and they'll likely remain elevated until 2025, according to Bankrate's True Cost of Auto Insurance Report. The report determined the annual cost for full coverage car insurance in 2024 to be $2,543, compared to $2,014 in 2023 and $1,771 in 2022.
Are car rates going down in 2024? ›
Auto loan rates for new and used vehicle purchases fell in the first quarter of 2024 to 6.73% and 11.91%, respectively, down slightly from the 15-year highs we saw at the end of 2023, according to Experian.
Why are auto insurance premiums going up? ›
Car accidents and traffic violations are common explanations for an insurance rate increase, but other reasons why your car insurance rate can go up include changing your address, adding a new vehicle or driver, increases to claims in your ZIP code, and increases to car repair/replacement cost.
Who normally has the cheapest car insurance? ›
USAA, Nationwide, Travelers, Erie, Geico and Progressive are the cheapest car insurance companies nationwide, according to our analysis.
Why is car insurance so expensive all of a sudden? ›
Inflation. Nobody in America will be surprised to learn that inflation has spread to all areas of the economy, including car insurance. As vehicles become more expensive to repair and replace, car insurance rates climb as well. The price of both new and used cars has soared over the past few years.
Why did my car insurance go up drastically? ›
While it can seem arbitrary, there are actual reasons you can see your price go up and down. Car insurance rates can change based on factors like claims, driving history, adding new drivers to your policy, and even your credit score.
What time of year is car insurance most expensive? ›
Drivers who insure their cars in December may pay more than 15% more than those who insure in February, the cheapest time of year, research by MoneySuperMarket found. However, December does not need to be more expensive than any other month of the year when using an insurance broker.
Car insurance typically drops as you grow older, when you drive safely for three to five years following an accident or citation, and when you switch to a cheaper company. Both men and women see the steepest drop in car insurance costs between ages 18 and 19.
How does credit score affect car insurance? ›
California, Hawaii, Massachusetts and Michigan don't allow insurance companies to use credit to determine car insurance rates.
How much is insurance going up in 2024? ›
Car insurance costs continue to rise. According to a report from Bankrate, average premiums for full coverage auto insurance hit $2,543 in 2024, a 26% increase from 2023. Unsurprisingly, drivers across the U.S. are looking for ways to save.
Does car insurance go down after 50? ›
Car insurance can be more expensive for older individuals — even those with a stellar driving record — for several reasons. Insurance companies usually offer lower rates for drivers between 45 to 55 years old, but once a driver turns 75, they should expect to pay more, according to Progressive.
How much is car insurance going up in CA? ›
Auto insurance rates are projected to soar by 54% in California in 2024. California is among three states expected to see auto insurance rate hikes of more than 50%.
How much will Medicare premiums increase in 2024? ›
The Centers for Medicare & Medicaid Services (CMS) has announced that the standard monthly Part B premium will be $174.70 in 2024, an increase of $9.80 from $164.90 in 2023.
Are rates going down in 2024? ›
Fannie Mae economists expect rates to drop more quickly, falling below 6% by Q4 2024. Meanwhile, the MBA's forecast for Q4 2024 is 6.1% and 5.9% for Q1 2025.
What is the future outlook of insurance? ›
Over the next five years (2024‒28), we forecast that total insurance premiums will grow by 7.1% in real terms, well above the global (2.4%), emerging (5.1%) and advanced (1.7%) market averages. At this rate, India will have the fastest growing insurance sector of the G20 countries.
Is homeowners insurance supposed to increase every year? ›
The insurance industry references the Consumer Price Index to measure inflation and adjusts rates accordingly. It's one reason property owners find that their home insurance keeps going up every year, even if nothing's changed on their property.
