Feel like you’re paying more than ever for car insurance? You’re not alone.
According to the U.S. Bureau of Labor Statistics, the average 6-month car insurance policy in July cost Americans $717.80.
That’s up nearly 18% from a year before and 71% in the last decade.
Premiums vary widely from state to state. A recent Washington Post analysis found changes as high as 88% in the last year. Florida won the shameful laurel of the state with the highest average price increase.
Neighboring Georgia has the largest decrease, with prices falling 24% in the last year. The Post found that rates had increased since last year in 33 states.
Why the drastic changes?
Soaring Repair Costs Driving the Problem
Repair costs are the single largest factor. A New York Times analysis in July found that the average cost to repair a car after an accident has soared 36% in just five years.
Related: Here’s How Much the Average Car Repair Now Costs
Today’s increasingly complex cars often have vulnerable sensors in positions where they’re likely to be damaged. The cameras, radar, and lidar systems that power smart cruise control, blind-spot monitoring and other safety systems can make even a fender-bender an expensive proposition.
Even a simple windshield replacement can now be a 4-figure repair thanks to embedded sensors and built-in lenses for traffic-scanning cameras.
“If an airbag goes off, that’s thousands of dollars,” David Woodall, a mechanic at Washington, D.C.’s Metro Motor, tells the Post. “A new car might have eight airbags in it.”
Accident rates are up nationwide in the aftermath of the COVID-19 pandemic.
Climate-Driven Disasters Playing a Part
“But the rate hikes are also an attempt by insurers to make up for big payouts driven by floods and natural disasters,” the Post explains.
Related: It’s Getting Harder to Find Car Insurance in California
Hurricane-prone Florida is the ultimate example. At least one prominent insurer – Farmers Insurance – recently elected to abandon the state entirely.
Related: Florida Car Insurance Rates Skyrocketing
But even inland, premiums are rising due to the weather. “In Colorado, car insurance premiums have increased 52 percent since last July as blizzards, tornadoes, and hailstorms have led to an increased number of claims,” the Post reports.
Hikes Have More Driving Uninsured
The Post found that rate hikes are driving a frightening trend – more drivers are choosing to go uninsured.
“A 2023 Policy Genius survey of nearly 3,000 drivers ages 17 to 34 found that in the past year, 17 percent of them opted to drive uninsured.”
Driving without insurance is illegal in every state. But many Americans can’t get to work effectively without a car.
