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A report by Insurify suggests that California auto insurance rates could increase by 54% by years end.
According to Insurify, it projects a 22% increase in car insurance costs after a 15% spike in the first half of 2024. This is due to rising repair costs put pressure on insurers, a flurry of legislative activity and rate approvals drove substantial car insurance premium increases in early 2024.
Car thefts drive up insurance premiums, too. Missouri and California are among the 10 states with the highest auto theft rates per capita, and Illinois had the fifth-highest number of stolen cars in 2023, NICB data shows. In data pulled from Contra Costa County Police Departments, here is a look at stolen vehicle thefts so far in 2024.
2024 Stolen vehicle Theft (Jan – July)
- 1,019 – City of Antioch
- 740 – City of Richmond
- 402 – City of Concord
- 262 – City of San Pablo
- 81 – City of Brentwood
- 70 – City of Walnut Creek (through June)
- 69 – City of Martinez
The report by Insurify also says part of the reason for California seeing a 54% increase was due to playing “catch up”.
“During COVID-19 shutdowns, states like California put a freeze on rate increases. That’s why so many people saw drastic rate hikes in 2023 after those restrictions were lifted,” said Mallory Mooney, a licensed insurance agent and director of sales and service at Insurify. “Insurers are still playing catch-up, and it’s too little too late for a lot of them. Insurers have had to pull out of some markets completely.”
Even with the 54% increase in California, it still ranked third overall in the United States with larger increases in Minnesota (61%) and Missouri (55%). After those three, the next biggest jump was 41% in Maryland.
|
Average Annual Cost of Full Coverage (June 2024) ▲▼ |
Projected Annual Cost of Full Coverage (End of 2024) ▲▼ |
Total Projected Increase in 2024 ▲▼ |
|
|---|---|---|---|
| United States | $2,329 | $2,469 | 22% |
| Alabama | $1,722 | $1,850 | 18% |
| Arizona | $2,026 | $2,195 | 22% |
| Arkansas | $2,386 | $2,597 | 34% |
| California | $2,417 | $2,681 | 54% |
| Colorado | $2,619 | $2,839 | 28% |
| Connecticut | $2,529 | $2,762 | 34% |
| Delaware | $2,982 | $3,152 | 13% |
| Florida | $3,201 | $3,444 | 18% |
| Georgia | $2,688 | $2,893 | 24% |
| Hawaii | $1,453 | $1,538 | 11% |
| Idaho | $1,467 | $1,583 | 22% |
| Illinois | $1,981 | $2,181 | 31% |
| Indiana | $1,591 | $1,736 | 29% |
| Iowa | $1,808 | $1,947 | 17% |
| Kansas | $2,028 | $2,179 | 24% |
| Kentucky | $2,285 | $2,464 | 24% |
| Louisiana | $3,182 | $3,423 | 23% |
| Maine | $1,209 | $1,263 | 6% |
| Maryland | $3,400 | $3,748 | 41% |
| Massachusetts | $1,770 | $1,933 | 40% |
| Michigan | $2,719 | $2,853 | 8% |
| Minnesota | $2,315 | $2,597 | 61% |
| Mississippi | $2,020 | $2,165 | 22% |
| Missouri | $2,386 | $2,673 | 55% |
| Montana | $1,890 | $2,023 | 24% |
| Nebraska | $1,653 | $1,766 | 21% |
| Nevada | $3,271 | $3,531 | 20% |
| New Hampshire | $1,000 | $1,053 | 4% |
| New Jersey | $2,372 | $2,520 | 9% |
| New Mexico | $1,962 | $2,127 | 27% |
| New York | $3,325 | $3,484 | 4% |
| North Carolina | $1,404 | $1,559 | 39% |
| North Dakota | $1,439 | $1,511 | 14% |
| Ohio | $1,545 | $1,691 | 33% |
| Oklahoma | $2,135 | $2,325 | 33% |
| Oregon | $1,814 | $1,983 | 35% |
| Pennsylvania | $1,898 | $2,073 | 35% |
| Rhode Island | $2,678 | $2,833 | 16% |
| South Carolina | $3,336 | $3,687 | 38% |
| South Dakota | $2,032 | $2,193 | 25% |
| Tennessee | $1,765 | $1,900 | 20% |
| Texas | $2,672 | $2,915 | 23% |
| Utah | $2,009 | $2,192 | 24% |
| Vermont | $1,410 | $1,499 | 13% |
| Virginia | $1,999 | $2,172 | 27% |
| Washington | $1,576 | $1,637 | -10% |
| Washington D.C. | $2,977 | $3,190 | 17% |
| West Virginia | $2,083 | $2,243 | 22% |
| Wisconsin | $1,604 | $1,732 | 25% |
| Wyoming | $1,573 | $1,648 | 8% |
Key Takeaways
- The cost of full-coverage car insurance increased by 15% in the first half of the year, despite industry expert predictions that rate hikes could slow in 2024. The average annual full-coverage premium now costs $2,329, according to Insurify data.
- Insurify predicts California, Missouri, and Minnesota could see car insurance costs increase by more than 50% in 2024. Damage from severe storms and wildfires contributes to rising rates in the states.
- Maryland has the highest car insurance costs in the U.S., with an average full-coverage rate of $3,400 annually. New Hampshire drivers pay the least, at an average of $1,000 annually.
- Vehicle maintenance and repair costs have increased by nearly 38% over the past five years, according to the Bureau of Labor Statistics Consumer Price Index (BLS CPI). Higher repair costs mean insurers pay more expensive claims and policyholders see higher premium hikes.
- Increasingly severe and frequent weather events are driving up auto insurance premiums. Hail-related auto claims represented 11.8% of all comprehensive claims in 2023, up from 9% in 2020, according to CCC Intelligent Solutions.
California is now playing catch-up
California’s insurance regulations emphasize consumer protections, requiring approval from the Department of Insurance (DOI) before insurers can implement rate increases. Drivers in the state still saw a 45% year-over-year full-coverage rate increase in the last year.
“During COVID-19 shutdowns, states like California put a freeze on rate increases. That’s why so many people saw drastic rate hikes in 2023 after those restrictions were lifted,” said Mallory Mooney, a licensed insurance agent and director of sales and service at Insurify. “Insurers are still playing catch-up, and it’s too little too late for a lot of them. Insurers have had to pull out of some markets completely.”
Additionally, California is increasing its minimum car insurance requirements to bring them in line with other states. California governor Gavin Newsom signed Senate Bill 1107 into law in late 2022, doubling and, in some cases, tripling the liability limits for auto insurance policies. The change goes into effect Jan. 1, 2025.
This means California residents will see even higher premiums next year, albeit with higher protection limits as well. The higher limits will prevent more drivers from going into debt after a car accident, but since it increases the financial burden on insurers, they will raise rates to match the new requirements.
|
Bodily Injury or Death Per Person ▲▼ |
Bodily Injury or Death Per Accident ▲▼ |
Property Damage Per Accident ▲▼ |
|
|---|---|---|---|
| Current CA Insurance Requirements | $15,000 | $30,000 | $5,000 |
| CA Insurance Requirements as of 1/1/2025 | $30,000 | $60,000 | $15,000 |
California’s consumer protection laws keep insurance costs down for policyholders, but it’s difficult for insurers to operate profitably. The state’s DOI is slow to approve rate hikes, and insurers have pulled back on writing policies. GEICO has closed all its California offices, State Farm has stopped quoting via phone, and Progressive has halted advertising in the state.[4]
As more insurers leave the state, the DOI may approve additional rate increases to keep companies in the market.
Previous Stories on insurance rates:
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.