Auto insurance coverage premiums are quickly growing once more, placing a big monetary pressure on tens of millions of People nationwide.
A brand new report from Insurify, an insurance coverage comparability platform, reveals that the common annual value of full-coverage auto insurance coverage in the US skyrocketed to $2,329 within the first half of 2024.
This represents a 15 p.c improve in comparison with 2023 and a staggering 48 p.c surge since 2021. The report predicts that this upward pattern will proceed, with the common value reaching $2,469 by the tip of 2024.
A number of elements have contributed to the sharp improve in automotive insurance coverage charges. Bloomberg’s Keith Naughton highlighted 5 primary contributors:
- Rising restore prices: Elevated automotive know-how and the upper value of EV repairs drive up insurance coverage claims.
- Extra and worse accidents: Site visitors fatalities have surged, resulting in bigger insurance coverage payouts.
- Technician and components shortages: Lack of expert labour and automotive components impacts restore occasions and prices.
- Elevated driving: Submit-pandemic driving habits have led to extra accidents and better claims.
- Insurance coverage business catch-up: Insurers modify premiums to replicate elevated dangers after pandemic reductions.
Given the elements driving up insurance coverage prices nationwide, it is no shock that some states have been hit more durable than others. Listed here are the ten costliest states for automotive insurance coverage.
1. Maryland
- Common annual value of full protection: $3,400
- Share greater than the US common: 46 p.c
- Projected common fee improve in 2024: 41 p.c
Maryland residents face the very best auto insurance coverage prices within the nation, with a mean month-to-month premium of $283. This steep price ticket, reflecting a staggering 43 p.c year-over-year improve, could also be linked to a surge in site visitors fatalities.
Maryland skilled an 8.2 p.c rise in motorized vehicle deaths in 2023, considerably greater than the nationwide common decline of three.6 p.c. New state laws, efficient July 1, 2024, mandates enhanced uninsured motorist protection (EUIM) for all auto insurance coverage insurance policies.
This coverage change, permitting drivers to mix the at-fault driver’s legal responsibility insurance coverage with their very own uninsured or underinsured motorist protection, will probably contribute to additional premium will increase as insurers modify to the added monetary accountability.
2. South Carolina
- Common annual value of full protection: $3,336
- Share greater than the US common: 43 p.c
- Projected common fee improve in 2024: 38 p.c
South Carolina follows carefully behind Maryland with a 43 p.c year-over-year surge in full-coverage auto insurance coverage premiums, reaching a mean of $278 per 30 days by June 2024.
The state’s infamous fame because the thirteenth most fraud-prone area for vehicle-related insurance coverage claims, as reported by the Nationwide Insurance coverage Crime Bureau (NICB), undoubtedly contributes to those elevated charges.
Insurers fastidiously issue within the potential for fraudulent claims when figuring out premiums. Furthermore, the heightened danger related to an lively 2024 hurricane season provides to insurance coverage prices.
A landmark 2023 South Carolina Supreme Court docket ruling imposed stricter monetary obligations on auto insurers. The choice mandates that insurers cowl property injury claims extending past the insured automobile when coping with uninsured or underinsured motorist protection (UM/UIM).
This expanded protection might improve premiums as insurance coverage firms modify to the brand new monetary tasks.
3. New York
- Common annual value of full protection: $3,325
- Share greater than the US common: 43 p.c
- The projected common fee improve in 2024: 4 p.c
As soon as holding the unlucky title of the costliest state for full protection auto insurance coverage, New York skilled a modest 1 p.c lower in premiums throughout the first half of 2024. Nevertheless, this slight reprieve is overshadowed by the extra important fee hikes in different states.
New York’s densely populated setting, rating ninth within the nation, contributes to greater insurance coverage prices as a result of elevated probability of accidents and claims.
Compounding the issue is New York’s doubtful distinction because the state with the very best variety of automotive thefts within the US, with a staggering 32,715 automobiles stolen in 2023. This elevated theft fee additional amplifies insurance coverage dangers, driving premiums upward.
The impression of rising automotive theft charges is obvious within the latest difficulties automotive house owners face. A Minnesota resident, Erin Walters reported being denied insurance coverage protection by a number of firms on account of her automotive’s make and mannequin.
As a direct response to the surge in theft claims, State Farm has carried out a brief moratorium on new insurance policies for particular Hyundai and Kia fashions in sure areas. These measures spotlight insurers’ challenges in managing elevated dangers and the next impression on customers.
4. Nevada
- Common annual value of full protection: $3,271
- Share greater than the US common: 40 p.c
- The projected common fee improve in 2024: 20 p.c
Nevada has skilled a considerable 20 p.c improve in full-coverage auto insurance coverage premiums since June 2023, with the common month-to-month value now reaching $273. The state’s rating because the third highest in automobile theft charges, with 572.7 thefts per 100,000 residents, considerably contributes to the elevated insurance coverage danger.
Nevada’s escalating local weather danger is poised to impression future premium charges additional. The state’s annual common of 450,000 acres burned by wildfires, mixed with the occasional injury from hurricanes and tropical storms, elevates the danger of automotive injury. In consequence, insurers are prone to incorporate these environmental elements into their premium calculations.
5. Florida
- Common annual value of full protection: $3,201
- Share greater than the US common: 37 p.c
- Projected common fee improve in 2024: 18 p.c
Florida drivers face a mean month-to-month value of $267 for full protection insurance coverage, a value considerably impacted by the state’s ongoing insurance coverage disaster. Extreme climate occasions have triggered a domino impact, with insurers exiting the market totally or declaring insolvency.
Notable examples embrace Farmers Insurance coverage’s withdrawal from the state in 2023 and AAA’s non-renewal of particular insurance policies. In response to this disaster, Florida has enacted a collection of legislative measures to scale back frivolous lawsuits, decrease insurance coverage prices, and fight auto insurance coverage fraud.
These reforms have primarily centered on the state’s infamous no-fault system, answerable for a staggering 74 p.c of questionable auto glass claims nationwide. Regardless of these efforts, Florida stays a difficult marketplace for insurers, characterised by low profitability.
Consequently, residents proceed to bear the brunt of this instability via a number of the nation’s highest auto insurance coverage charges.
6. Louisiana
- Common annual value of full protection: $3,182
- Share greater than the US common: 37 p.c
- Projected common fee improve in 2024: 23 p.c
Louisiana drivers face a steep common of $261 month-to-month for full protection insurance coverage, a value more and more pushed by the state’s escalating insurance coverage disaster. Whereas the scenario has primarily impacted owners, the rising danger of hurricanes and tornadoes additionally impacts automotive insurance coverage charges. Complete protection, important for shielding towards weather-related damages, contributes to this rise.
As well as, Louisiana skilled a ten p.c surge in automobile thefts in 2023, in line with NICB information. This improve in stolen automobiles additional elevates insurance coverage dangers and, consequently, premiums. In response, Louisiana lawmakers enacted auto insurance coverage reforms in 2024.
These measures intention to curtail extreme medical billing in private harm lawsuits and shorten the timeframe for policyholders to file immovable property claims to 2 years from the date of recognized or moderately knowable injury. The reforms are supposed to decrease automotive insurance coverage charges by lowering insurer liabilities.
7. Delaware
- Common annual value of full protection: $2,982
- Share greater than the US common: 28 p.c
- Projected common fee improve in 2024: 13 p.c
Delaware drivers are shelling out a mean of $249 month-to-month for full protection insurance coverage, a 9 p.c improve since June 2023. The state’s excessive inhabitants density, rating seventh within the nation, contributes to congested roadways, growing the probability of accidents and insurance coverage claims.
Nevertheless, there is a silver lining for Delaware policyholders. In January 2024, the state’s Division of Insurance coverage carried out a brand new rule mandating immediate refunds of unearned auto insurance coverage premiums when a coverage is cancelled. This regulation relieves drivers by guaranteeing they obtain well timed reimbursement for unused protection.
8. Washington, DC.
- Common annual value of full protection: $2,977
- Share greater than the US common: 28 p.c
- Projected common fee improve in 2024: 17 p.c
District of Columbia drivers face a steep 17 p.c year-over-year improve in full protection insurance coverage prices, bringing the common month-to-month premium to $248. In accordance with NHTSA information, the nation’s most densely populated space, DC, additionally skilled a staggering 40 p.c rise in site visitors fatalities between 2022 and 2023.
This harmful mixture of things will increase the probability of insurance coverage claims, driving up premiums. Nevertheless, aid could also be on the horizon. The DC legislature has carried out a brand new regulation requiring insurers to acquire prior approval for fee hikes. This replaces the earlier “file-and-use” system, which allowed rapid fee will increase.
9. Michigan
- Common annual value of full protection: $2,719
- Share greater than the US common: 17 p.c
- Projected common fee improve in 2024: 8 p.c
Michigan’s 2019 adoption of a no-fault insurance coverage system aimed to curb rising charges, however challenges persist. Whereas the state skilled a extra modest 4 p.c improve in full-coverage premiums between June 2023 and June 2024 in comparison with the nationwide 28 p.c surge, Michigan’s common of practically $227 per 30 days stays among the many highest within the nation.
Excessive fraud charges are exacerbating the difficulty. The Michigan Division of Insurance coverage and Monetary Providers reported a staggering 3,789 fraud instances between July 2023 and June 2024, with 99 p.c of the instances insurance-related and half involving auto and no-fault claims. This rampant fraud will increase insurance coverage dangers, finally resulting in greater premiums for sincere policyholders.
10. Georgia
- Common annual value of full protection: $2,688
- Share greater than the US common: 15 p.c
- Projected common fee improve in 2024: 24 p.c
Georgia drivers pay a mean of $224 month-to-month for full protection insurance coverage. A major issue contributing to those excessive prices is the state’s substantial automobile theft drawback. Georgia ranked ninth within the nation for automotive thefts in 2023, with over 28,000 automobiles reported stolen. Insurers issue this heightened danger into premium calculations, driving up charges for all policyholders.
In July 2023, Georgia enacted Home Invoice 221, requiring a 60-day evaluate interval for fee will increase to curb rising premiums. Nevertheless, regardless of this new regulation, full protection prices surged by 21 p.c between June 2023 and June 2024, indicating that different elements additionally drive up insurance coverage bills.
Given the rising prices of auto insurance coverage, it is important to contemplate all accessible choices to guard your funding. Whereas complete protection is essential, an usually missed however doubtlessly very important add-on is Assured Asset Safety (GAP) insurance coverage. GAP protection bridges the hole between a automobile’s precise money worth and the remaining mortgage or lease steadiness in case of a complete loss.
The significance of GAP insurance coverage is underscored by the expertise of Drea, a lady who bought a secondhand Tesla with out this protection. When Drea was concerned in an accident, her customary insurance coverage payout fell in need of her mortgage steadiness, leaving her with $700 month-to-month funds for a automotive she might not drive.
Such conditions spotlight the monetary dangers related to forgoing GAP insurance coverage, particularly in states with excessive automobile theft charges and rising insurance coverage prices.
