The year 2023 saw a lot of changes in the insurance market. For some, insurance was harder to come by. For many, it was just one more rising price, pushing up the cost of living.
But now it's a new year. We can't know for sure what 2024 will bring, but we want to provide a few predictions from our insurance experts.
This year, consumers can expect to see some big changes in the market including higher prices continuing to rise and likely continued difficulty aquiring insurance in certain geographies.
Average cost of auto insurance is rising
The average annual cost to insure a car in the United States was $1,841 in 2023. That's a 5% increase over the previous year. (Of course, between 2022 to 2023, there was a 15% jump, so you may still be feeling the double digit increase).
We predict a continued increase in 2024.
Hunter Black, one of The Zebra's seasoned insurance agents, explains: "I can say rates are high due to the record amount of catastrophic weather events over the last few years. Also, insurance carriers gave out stipends during Covid, and saw record auto claims once the pandemic ended due to more cars on the road. All of this affected insurance carriers' loss ratios in a negative way, so increasing rates will help recover those losses."
Increases vary based on where you live
In addition to individual factors like how you drive, where you live can be one of the biggest factors in how much you pay.
- The states with the highest annual premiums are Florida and Louisiana both with an average premium of over $2,700 per year. That's 47% more than the national average.
- The states with the lowest premiums are Vermont and Idaho, both with annual premiums 35% below the national average.
- 19 states now pay an average of more than $2,000 a year in auto insurance premiums.
Fewer options for coverage for some
Much as where you live can affect how much you pay for insurance, it can also affect the insurance options you have. In some states, the prolifieration of weather events has meant insurance companies are not writing new policies. We have a more specific article on this ongoing crisis and what is being done, but suffice is to say, we don't predict 2024 will bring an end to the root cause: extreme weather caused by global climate change.
What you drive can also affect what coverage you can find. In 2023, some major insurers dropped coverage for Kia and Hyundai cars due to an increase in car thefts of certain models. While the automakers have made attempts to fix security vulnerabilities, thefts for these vehicles remains high.
Methodology
The auto insurance rates displayed throughout this page come from The Zebra’s Dynamic Insurance Rating Tool, a proprietary insurance premium estimator that uses the most recent rate filings across the United States at the ZIP code level to provide the most recent and up-to-date rate data. This data comes from Quadrant Information Services, which sources the most recent and approved rate filings across insurance companies in every state from S&P Global.
Rates are based on a sample driver profile — a 30-year-old single male driver with a Honda Accord and full coverage at these levels:
- $50,000 per person/$100,000 per incident for bodily injury liability
- $50,000 per incident for property damage liability
- $500 deductibles for collision and comprehensive coverage
To provide insight to consumers on how specific personal factors (like age, location and coverage level) can affect your premium, this base profile is then adjusted for different factors commonly used by insurance companies.