Where car insurance costs are rising the fastest
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Car insurance costs increased in all but a smattering of states between 2023 and 2024, a new report finds.
Why it matters: Rising insurance costs and other car-related expenses are creating an affordability crisis with little room to maneuver, as Axios' Courtenay Brown writes.
Driving the news: The average annual cost of full auto coverage increased 15% nationwide in 2024, per a new report from Insurify, which helps drivers compare quotes from multiple providers.
- But drivers in some states got hit much worse.
- Rates skyrocketed 58% in Minnesota, 53% in Maryland and 48% in California, for example.
By the numbers: Minnesota drivers are paying an average of $2,524 for full coverage annually as of 2024. Marylanders are coughing up $4,060, and Californians $2,575.
- Americans broadly are paying an average of $2,313 for full annual coverage.
What they're saying: Insurance costs are driven by several factors, Insurify's Chase Gardner tells Axios.
- First is the likelihood that drivers will file a claim, and how much those claims will cost to pay out. Accident and theft rates, plus the cost of repair work and parts, all have an impact.
- Extreme weather plays a role too, Gardner says, with natural disasters like hail and wind leading to a spike in claims in several states.
- State policies also matter. California, for example, recently doubled its liability limits, which affords "more protection to drivers after an accident but pushes up premiums," per Insurify's report.
Stunning stat: Electric vehicles are now 24% more expensive to insure than their comparable internal-combustion brethren, Insurify found, in part because they're more expensive to repair after accidents.
- Yes, but: EV owners may still come out on top when factoring in fuel and regular maintenance savings — not to mention tax credits and incentives.
How it works: Insurify's report is based on 97 million-plus rates quoted to drivers using the platform, and reflects median insurance costs for drivers between 20 and 70 years old with clean records and at least average credit.
- For yearly prices, the report uses two-year rolling medians "to manage extreme market volatility over the past few years."
What's next: Car insurance rates are likely to increase just 5% nationwide this year, Insurify predicts.
- "Slowing rate hikes will bring welcome financial relief for American drivers, who saw full-coverage premiums increase by an average of 42% ... between 2021 and 2024," per the report.
- Yet New York, Florida and Georgia drivers should prepare for costlier bumps this year, Insurify warns, citing reasons from climate risks to insurance fraud.
