Auto insurance premiums in the United States are on the rise once again, putting a significant financial strain on millions of Americans nationwide. A recent report from Insurify, an insurance comparison platform, has revealed that the average annual cost of full-coverage auto insurance in the US has skyrocketed to $2,329 in the first half of 2024. This represents a 15 percent increase compared to 2023 and a staggering 48 percent surge since 2021. The report predicts that this upward trend will continue, with the average cost reaching $2,469 by the end of 2024.
Several factors have contributed to the sharp increase in car insurance rates. Bloomberg’s Keith Naughton highlighted five main contributors:
1. Rising repair costs: Increased car technology and the higher cost of EV repairs drive up insurance claims.
2. More and worse accidents: Traffic fatalities have surged, leading to larger insurance payouts.
3. Technician and parts shortages: Lack of skilled labor and car parts impacts repair times and costs.
4. Increased driving: Post-pandemic driving habits have led to more accidents and higher claims.
5. Insurance industry catch-up: Insurers adjust premiums to reflect increased risks after pandemic discounts.
With these factors driving up insurance costs nationwide, it is no surprise that some states have been hit harder than others. Here are the top 10 most expensive states for car insurance in 2024:
1. **Maryland**:
– Average annual cost of full coverage: $3,400
– Percentage higher than the US average: 46 percent
– Projected average rate increase in 2024: 41 percent
Maryland residents face the highest auto insurance costs in the nation, with an average monthly premium of $283. This steep price tag, reflecting a staggering 43 percent year-over-year increase, may be linked to a surge in traffic fatalities. Maryland experienced an 8.2 percent rise in motor vehicle deaths in 2023, significantly higher than the national average decline of 3.6 percent.
2. **South Carolina**:
– Average annual cost of full coverage: $3,336
– Percentage higher than the US average: 43 percent
– Projected average rate increase in 2024: 38 percent
South Carolina follows closely behind Maryland with a 43 percent year-over-year surge in full-coverage auto insurance premiums, reaching an average of $278 per month by June 2024. The state’s notorious reputation as the 13th most fraud-prone region for vehicle-related insurance claims undoubtedly contributes to these elevated rates.
3. **New York**:
– Average annual cost of full coverage: $3,325
– Percentage higher than the US average: 43 percent
– Projected average rate increase in 2024: 4 percent
New York, once the most expensive state for full coverage auto insurance, experienced a modest 1 percent decrease in premiums in the first half of 2024. However, the state’s densely populated environment and high car theft rates contribute to higher insurance costs. New York’s dubious distinction as the state with the highest number of car thefts in the US further amplifies insurance risks, driving premiums upward.
4. **Nevada**:
– Average annual cost of full coverage: $3,271
– Percentage higher than the US average: 40 percent
– Projected average rate increase in 2024: 20 percent
Nevada has experienced a substantial 20 percent increase in full-coverage auto insurance premiums since June 2023, with the average monthly cost now reaching $273. The state’s ranking as the third highest in vehicle theft rates significantly contributes to the increased insurance risk. Nevada’s escalating climate risk is poised to impact future premium rates further, with wildfires and occasional damage from hurricanes and tropical storms elevating the risk of car damage.
5. **Florida**:
– Average annual cost of full coverage: $3,201
– Percentage higher than the US average: 37 percent
– Projected average rate increase in 2024: 18 percent
Florida drivers face an average monthly cost of $267 for full coverage insurance, significantly impacted by the state’s ongoing insurance crisis. Severe weather events have triggered a domino effect, with insurers exiting the market or declaring insolvency. Legislative measures have been enacted in Florida to reduce frivolous lawsuits, lower insurance costs, and combat auto insurance fraud, but the state remains a challenging market for insurers, characterized by low profitability.
6. **Louisiana**:
– Average annual cost of full coverage: $3,182
– Percentage higher than the US average: 37 percent
– Projected average rate increase in 2024: 23 percent
Louisiana drivers face a steep average of $261 monthly for full coverage insurance, increasingly driven by the state’s escalating insurance crisis. Comprehensive coverage, essential for protecting against weather-related damages, contributes to this rise. Lawmakers in Louisiana have enacted auto insurance reforms in 2024 to lower car insurance rates by reducing insurer liabilities.
7. **Delaware**:
– Average annual cost of full coverage: $2,982
– Percentage higher than the US average: 28 percent
– Projected average rate increase in 2024: 13 percent
Delaware drivers are shelling out an average of $249 monthly for full coverage insurance, with the state’s high population density contributing to congested roadways and increasing the likelihood of accidents and insurance claims. A new regulation in Delaware mandates prompt refunds of unearned auto insurance premiums when a policy is canceled, providing relief to drivers.
8. **Washington, DC**:
– Average annual cost of full coverage: $2,977
– Percentage higher than the US average: 28 percent
– Projected average rate increase in 2024: 17 percent
District of Columbia drivers face a steep 17 percent year-over-year increase in full coverage insurance costs, with a 40 percent rise in traffic fatalities between 2022 and 2023. A new law in DC requires insurers to obtain prior approval for rate hikes, replacing the previous system that allowed immediate rate increases.
9. **Michigan**:
– Average annual cost of full coverage: $2,719
– Percentage higher than the US average: 17 percent
– Projected average rate increase in 2024: 8 percent
Michigan’s adoption of a no-fault insurance system aimed to curb rising rates, but challenges persist. High fraud rates in Michigan increase insurance risks, ultimately leading to higher premiums for honest policyholders. The state experienced a more modest 4 percent increase in full-coverage premiums between June 2023 and June 2024 compared to the nationwide surge.
10. **Georgia**:
– Average annual cost of full coverage: $2,688
– Percentage higher than the US average: 15 percent
– Projected average rate increase in 2024: 24 percent
Georgia drivers pay an average of $224 monthly for full coverage insurance, with a significant vehicle theft problem driving up costs. Legislative measures in Georgia aim to curb rising premiums, but other factors contribute to the high insurance expenses faced by residents.
In conclusion, the rising costs of auto insurance in the US highlight the importance of considering all available options to protect your investment. Comprehensive coverage is crucial, but additional coverage such as Guaranteed Asset Protection (GAP) insurance can bridge the gap between a vehicle’s actual cash value and the remaining loan or lease balance in case of a total loss. As insurance rates continue to increase, it is essential for consumers to stay informed and explore all available options to ensure adequate protection for their vehicles.
