Car Insurance Premiums Expected to Increase in 2024
Projected jump of 12.6% would be highest rate hike in 6 years…
American drivers should prepare themselves for another year of automobile insurance sticker shock, with auto insurers expected to raise car insurance premiums by an average of 12.6% in 2024, after raising rates by 11.2% in 2023.
The projected jump would be the highest rate increase since 2018, according to The State of Auto Insurance in 2024 report published by ValuePenguin.com, a LendingTree subsidiary.
The average annual cost of auto insurance is expected to reach $1,984 in 2024, and drivers across all 50 states will see premiums increase, the report stated.
2024 Auto Insurance Rate Predictions:
- If the industry reaches the projected 12.4% jump in 2024, it will be the highest rate increase over the past six years. The average cost of car insurance has increased 29% overall since 2018.
- Every state is expected to see a rate increase of at least 3% this year. Nevada will experience the country’s largest auto insurance rate hike in 2024—a healthy 28% increase over 2023. Washington state (18%), Arizona (17%), Connecticut (17%), Louisiana (16%) and Georgia (16%) drivers can also expect substantial increases in their auto insurance premiums in 2024.
- The average cost of full coverage car insurance in 2024 will be $1,984 per year, with Michigan, Florida and Nevada residents paying the highest average premiums, and Maine, New Hampshire and Idaho residents paying the lowest average premiums.
- Drivers with traffic violations will see their premiums jump 52% on average, with drivers in North Carolina, California and Hawaii facing the stiffest financial penalties—an increase of over 90% for traffic violations and dangerous driving.
- Insuring electric vehicles is getting cheaper in 2024, but insurance for new EVs will still be 23% higher than new gasoline-powered cars. Tesla’s Model X, Model 3 and Model Y have the highest insurance premiums in 2024, while the Honda CR-V and Ford F-150 are the cheapest cars to insure in 2024.
As auto insurance premiums continue to rise, 54% of Americans report they’re struggling to afford auto insurance. Divya Sangameshwar, an insurance expert at ValuePenguin.com says the struggle will likely worsen for millions of Americans in 2024.
“While Americans will likely feel the pinch across the board, Gen Z drivers will be hit the hardest in terms of insurance affordability,” she states. “With these insurance rate adjustments, the country’s youngest drivers will pay 188% more for car insurance than their older peers in 2024.”
What are the driving forces behind these rate hikes? While inflation has started to slow down, cars continue to be more expensive to repair or replace.
Last year also brought substantial severe weather that drove up the number of claims for insurers. As the U.S. faces more extreme weather over time, car insurance rates will increase to match the higher risk that weather poses, the report stated.
Finally, the rise in car thefts since 2022, including the 700% increase in catalytic converter thefts since 2019, are also contributing to higher insurance costs.
Read the full State of Auto Insurance 2024 Report HERE.
