Car insurance prices soar even as inflation eases. Which states have the highest rates? (2024)

If you think your food bill is high then look at your car insurance.

Bankrate estimates the national average cost of full coverage car insurance in 2024 increased by 26% to $2,543, up $529 from a year earlier. That’s six times faster than overall inflation and more than any food item at the grocery store, including eggs, over the past three years, according to insurance comparison site Jerry.

And the rise isn't over, analysts say.

“There is likely further pain ahead,” Jerry said in a report.

Which states have the most expensive car insurance?

According to Bankrate, the states with the highest average annual premium are:

Lower your auto insurance costs: Find the best car insurance of 2023

◾ Florida: $3,945

◾ New York: $3,840

◾ Louisiana: $3,618

The states where people are spending the largest percentage of their income on car insurance, or what Bankrate calls the “true cost,” are:

◾ Louisiana at 6.53%, up 1.76% from 2023

◾ Florida at 5.69%, up 0.79%

◾ Michigan at 5.01%, up 1.51%

Note: Louisiana and Florida tend to rank high because both experience frequent catastrophic claims fromextreme weather, Bankrate said.

Allstate began selling direct auto insurance again on Feb. 7 in California after receiving approval in December for a rate hike, but rates are up to 30% higher, it said in an earnings conference call last week.

Allstate, along with other insurance companies, had halted new direct auto insurance sales due to increased costs in California, partly due to weather patterns.

"Our payments to help customers recover from accidents and disasters have increased significantly over the last few years and we need to adjust rates to reflect the cost of providing the protection our customers depend on," Allstate said in a statement.

What should I pay?Compare car insurance quotes in February 2024

Car insurance prices soar even as inflation eases. Which states have the highest rates? (1)

What states are the least expensive for car insurance?

By average annual premium, Bankrate says:

◾ Vermont: $1,353

◾ Idaho: $1,421

◾ Maine: $1,507

By true cost:

◾ Massachusetts: 1.76%, down 0.26% from 2023

◾ Hawaii: 1.79%, down 0.22%

◾ Washington: 1.80%, down 1%

Why are car insurance rates so high?

Car insurance rates depend on your location, age, driving record, credit history and type of vehicle. Electric vehicles tend to be costlier to insure because of high sticker and repair costs).

Other factors that have nothing to do with you count too.

The “drastic increase” in car crash fatalities, vehicle parts and labor costs, and extreme weather claims over the past few years have contributed to rising rates, said Shannon Martin, analyst at financial products comparison site Bankrate.

Not only does extreme weather cause damage to vehicles, but it can also create hazardous driving conditions that result in more accidents.

Meanwhile, the fatality rate during the first half of 2023 was 1.24 per 100 million vehicle miles traveled, up 16% from the same 2019 period, according to the National Highway Traffic Safety Administration.

Thefts are also soaring, topping 1 million in 2022 for the first time since 2008, according to the National Insurance Crime Bureau.

"Increased crime rates are going to translate to (paying) a higher premium for your vehicle," David Glawe, NICB president and chief executive, warned last year.

Why will premiums keep rising?

Vehicles, parts and equipment prices have stabilized or dipped slightly, but they remain elevated.

“Every major car ownership expense except gas is dramatically more expensive than it was just three years ago, including used cars and trucks (+24%) and new cars (+19%),” Jerry wrote.

Maintenance and repair costs are also expected to continue climbing “driven by the growing use of advanced, pricier technology in vehicles and a shortage of qualified technicians to service and repair that technology,” Jerry said. “This is a long-term problem.”

Martin noted, too, that “climate scientists predict that extreme weather will get worse, not better.”

You'll need to save for insurance, too:You finally can afford the car. Now, what about insurance? Why that could be a problem.

What can I do to keep car insurance costs down?

Shop around. “You’ll see more insurers competing for your business, which generally equals more choices and competitive pricing for customers,” said Josh Damico, Jerry's vice president of insurance operations.

Consider unbundling. Usually, you can get better pricing by bundling home and auto with one insurer, butthat’ll “likely be more challenging in 2024,” Damico said.“The odds of finding a better policy by separating your home and auto are likely to increase.”

Telematics, or collection of your mileage and driving habits: “Driving data could become the single most important insurance pricing factor of 2024,” Damico said. “More insurers will use telematics programs to attract drivers with an opt-in discount and qualify for additional discounts at renewal.”

Medora Lee is a money, marketsand personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.comand subscribe to our freeDaily Money newsletterfor personal finance tips and business news every Monday through Friday morning.

Car insurance prices soar even as inflation eases. Which states have the highest rates? (2024)

FAQs

What state has the most expensive car insurance? ›

What are the 10 most expensive states for car insurance?
  1. Florida. Average annual full-coverage car insurance: $3,945. ...
  2. New York. Average annual full-coverage car insurance: $3,840. ...
  3. Louisiana. Average annual full-coverage car insurance: $3,618. ...
  4. Nevada. ...
  5. Michigan. ...
  6. Colorado. ...
  7. Missouri. ...
  8. Pennsylvania.
Apr 23, 2024

Are car insurance rates surging across the US? ›

It's the biggest spike since the 1970s. Bankrate, a consumer financial services company, shows the average premium cost for full coverage in the U.S. ballooned to $2,543 this year compared to $2,014 in 2023. Drivers in California pay even more as prices rose to $2,697.

Does inflation affect car insurance rates? ›

The big insurance companies have been relatively quiet about what's driving rates up. Inflation is definitely a big part of the equation. Everything now costs more, including cars and car repairs, and insurance companies are passing those costs on to consumers.

Are car insurance premiums soaring? ›

Car insurance is getting more expensive. The average annual premium for full coverage auto insurance in the U.S. rose to $2,543 in 2024 — up 26% from the previous year, according to Bankrate.

What state has the lowest homeowners insurance rates? ›

Hawaii is the cheapest state for home insurance at only $631 a year, on average. Where you live in the state will also make a difference; for example, coastal homes will often see higher rates than those inland.

Why does Florida have the highest car insurance rates? ›

Insurance rates in Florida were affected by severe weather events (hurricanes, tornadoes, flooding), the skyrocketing cost of auto parts, multiple insurers halting new policies or leaving the state completely, and rampant insurance fraud, Insurify's report said.

Does credit score affect car insurance? ›

On average, drivers with poor credit pay 118 percent more for full coverage car insurance than those with excellent credit. California, Hawaii, Massachusetts and Michigan prohibit or limit the use of credit as a rating factor in determining auto insurance rates.

Why did my auto insurance go up in 2024? ›

Your particular driver profile, which includes factors like where you live, your age and your driving record, influences what you pay for car insurance. But rising car repair costs and an increase in disaster-related claims are significant reasons why car insurance rates are surging for many drivers.

What city in the US has the highest car insurance? ›

Detroit drivers still spend the most money on car insurance in the country, according to an annual report. Bankrate's True Cost of Auto Insurance report found that drivers in Detroit spend an average of $5,687 per year for full coverage, which equals about 7.98% of the median household income.

Do insurance companies do well during inflation? ›

Periods of high inflation can result in insurance companies experiencing higher claims payouts and operating costs, leading to more expensive premiums for the consumer.

Why is Liberty Mutual so cheap? ›

Liberty Mutual can be cheap because of its savings opportunities and overall market share. The company's safe driving program RightTrack can help policyholders save up to 30% on their premiums. Liberty Mutual also has many other discounts for military members, homeowners and good students.

Why did Liberty Mutual raise my insurance? ›

Car insurance rates can change based on factors like claims, driving history, adding new drivers to your policy, and even your credit score.

Why is Allstate so expensive? ›

Allstate is so expensive because car insurance is expensive in general, due to rising costs for insurers. Allstate's premiums may also reflect how competitively Allstate agents are paid, but at $781 per year, the average Allstate car insurance policy is actually cheaper than coverage from most competitors.

Who is the cheapest car insurance? ›

The Cheapest Car Insurance Companies
CompanyLearn More
#1USAA » 4.9 U.S. News RatingCompare Quotes » (855) 939-3108
#2Erie Insurance » 3.4 U.S. News RatingCompare Quotes »
#3Auto-Owners » 4.7 U.S. News RatingCompare Quotes »
#4Nationwide » 4.1 U.S. News RatingCompare Quotes »
2 more rows
Apr 17, 2024

Why did my car insurance go up when nothing changed? ›

If your car insurance goes up for seemingly no reason when you renew your policy, it's likely due to an increase in risk that's outside of your control. This could include reasons like increased claims in your area (due to more extreme weather damage, more accidents, etc.) and higher car repair and replacement costs.

Where is the most expensive place to insure a car? ›

Our data shows Michigan has the highest car insurance on average with full-coverage rates of $3,785 per year or $315 per month.

What state has the most expensive car prices? ›

The Most Expensive States To Own A Car
Average Cost
RankStateUsed Car
1California$35,759
2Nevada$34,859
3Florida (Tie)$34,519
7 more rows
Mar 28, 2024

In what three states is it most expensive to own a car? ›

The Most Expensive States To Own A Car
RankStateTotal Score Out of 100
1California100.00
2Nevada80.63
3Florida (Tie)75.03
8 more rows
Mar 10, 2023

What is the most expensive state to register a car in? ›

Oregon is the most expensive car registration state. It's the only state that categorizes its registration fees based on miles per gallon, making it the worst state to register a car in.

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