A new report from Insurify anticipates a 22% total projected increase in 2024 car insurance rates.
The total is down slightly from 2023, when car insurance rates increased 24%.
The significant increases are primarily a result of insurer losses due to inflationary pressures, including the rising costs of vehicle repairs and the skyrocketing prices of new cars. An increase in damage from weather-related claims and fraud has also played a role.
“I think climate risk will likely start to play a role in new areas. As we experience tornadoes, hail, and flooding in places where they weren’t necessarily a major threat before, the increased frequency and severity of these events will need to be considered in pricing,” said Betsy Stella, vice president of carrier management and operations at Insurify.
Texas ranked No.27 with a projected increase of 23%.
Minnesota ranked No.1 with a projected increase of 61%, while Washington came in last with a projected decrease of 10% — the only state to see a projected decrease in car insurance rates. The lowest projected increase was 4%, seen by New York and New Hampshire.
Fox Business reports on the skyrocketing projections for car insurance premiums and where drivers are expected to see the biggest increases. Here’s the start of the story:
Car prices are finally on the down swing, but drivers are facing a new financial hurdle: surging auto insurance premiums.
A new report published by Insurify, an insurance comparison shopping site, shows the average U.S. rate for full auto insurance surged to $2,329 in the first half of 2024. That marks a 15% increase from 2023 and a stunning 48% spike when compared with 2021.
By the end of 2024, the cost of coverage is expected to rise even further, to $2,469, according to the report.
The problem is even worse in some states, where prices are projected to rise more than 50% this year.
Minnesota
Prices are expected to rise most sharply in Minnesota, with a projected increase of 61%. That would bring the average annual cost of full coverage in the state to $2,597, from the current level of about $2,315, according to the report.
One reason for the spike is the increased risk of severe weather events. In 2023, Minnesota recorded $1.8 billion in damages due to a severe storm that produced hail the size of golf balls and baseballs, Insurify data insight manager Chase Gardner told FOX Business.
“These states have been historically considered severe weather safe havens,” Gardner said. “But insurance companies are having to reassess that risk in the state.”
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.