Car insurance premiums across the U.S. are on the rise, with a 15% increase since the beginning of the year, according to a new report by Insurify. The report projects an overall 22% increase by the end of 2024, raising the average annual full-coverage premium from $2,329 to $2,469.
This rise in premiums is a continuation of last year's trend, which saw significant increases due to record-high underwriting losses, totaling $33.1 billion in 2022. The report attributes these rising costs to several factors, including a spike in weather-related claims, inflated prices of new cars and soaring repair costs, particularly for vehicles equipped with advanced driver-assistance systems (ADAS) and EVs.
The report noted that from 2019 to 2023, there was a 56% increase in billion-dollar weather events compared to the previous decade. Hailstorms alone can cause claims averaging $5,000, with some storms generating claims exceeding $130 million.
In addition to weather-related damages, the complexity and cost of repairing newer vehicles are also driving up insurance premiums. Vehicles with ADAS features can add up to 37.6% to total repair costs, while EVs are 46.9% more expensive to repair than their gas-powered counterparts, with an average repair cost of $6,700. The report also highlights that EV repairs take an average of 5.8 days longer to complete.
The impact of these rising costs is felt most acutely in six states where average annual premiums have surpassed the $3,000 mark: Florida, Louisiana, Maryland, Nevada, New York and South Carolina. These states have premiums at least 15% higher than the national average. On the other end of the spectrum, New Hampshire boasts the lowest average premium at $1,000.
The report also points to significant premium increases in several states, with Minnesota leading the pack with a 55% rise, followed closely by Missouri (51%), North Carolina (46%), Illinois (46%) and California (45%). Car theft rates have also contributed to premium spikes, with California, Illinois and Missouri ranking among the top states for vehicle theft in 2023.
