Car insurance rates – like almost everything else in life – have been on the rise for some time now, blowing past the overall Consumer Price Index (CPI) by a long shot and recently posting their largest percent increase since the 1970s. Things have gotten so bad that more and more consumers are reportedly passing on purchasing certain vehicles solely due to insurance rates. Regardless, while the prices of certain goods like new vehicles has begun to cool, that doesn’t seem likely with car insurance rates.
Rather, according to a new report from Insurify, car insurance rates are expected to rise by a total of 22 percent by the end of this year, which is far higher than the 15 percent increase posted over the first half of 2024. This comes after full-coverage premiums rose by 24 percent in 2023 in response to a record in terms of underwriting losses – $33.1 billion in 2022, which did at least decrease to $17 billion in 2023.
The reasoning behind this growth can be attributed to a few factors – for starters, the fact that vehicles are becoming more complicated and chock full of pricey parts like those used in ADAS systems and batteries in EVs and hybrids, which has led to more vehicles being totaled rather than repaired. Insurify also points to a combination of inflationary pressures including the rising cost of vehicle repairs and higher new vehicle pricing, coupled with a number of weather-related claims in states that haven’t historically seen as much of that type of damage in the past.
Additionally, in some states, legislative changes have increased insurers’ financial responsibility in certain cases, which has prompted those companies to charge higher premiums. In California, which froze insurance rates during the COVID-19 pandemic, some insurers are now requesting double-digit hikes as they struggle to return to profitability, while others are exiting the state entirely, in fact.
We’ll have more on automotive insurance costs soon, so be sure and subscribe to Ford Authority for continuous Ford news coverage.
Comments
This is the same flawed study that says that South Carolina, where I live, is one of the top 2 states with the highest rate increases. My rates are DROPPING year over year. Meanwhile, old friends in Florida are SCREAMING about rate increases and FL is not even mentioned. Toss it in the can. Now, HOMEOWNERS rates are a different story.
All because of poor design decisions. Like the 1000.00 tail lights in the F150 with the blind spot sensors and LEDs that run off a special modules.
Time to start thinking of the kiss method because this crap that is almost impossible for dealers to repair is causing new prices and repair prices to go through the roof. I seen these full of water that cost the owner Ann arm and a leg to repair. Not what we want
Don’t forget $2000+ headlights on Lincolns that require complete replacement when they burn out. Let’s go back to replacing bulbs on everything. No reason a plastic housing with some LED’s should cost over $100.
I have posted here before. Insurance companies are in the business to make money,not loose it. I agree with just about everything here. However why should me driving a 2019 whatever with no comprehensive coverage, or collision have to get whacked with higher rates? Let the owners of these rolling repair nightmares pay the price!!! If you can afford to buy it you can insure it.
Ya, We LIVE in the Wonderful State of Cali-Foreignya, and the RATES for everything are OUT OF CONTROL! Chalk that up to GAVIN NUSSILINI! We “PAY” through the nose for everything in this State. And it will Continue to IMPLODE upon Itself with this type of “Management” for lack of another Term!! Poor, Terrible, Lousy Management!! It Ain’t going away Either, It’s an ever loving MESS in this State!
Not surprising. Too much technology. What use to be a $700 minor parking lot bump is now $5000. Totally ridiculous. The entire auto industry is in a death spiral. Vehicles are too expensive and if you do overextend to buy one you can’t afford to insure or repair it.
Beyond the cost of repairs, it also doesn’t help that there’s huge amounts of car thefts going on. Criminals aren’t being punished in many states leading to out of control crime.
It’s way more expensive to replace a stolen vehicle than to pay to replace a taillight.