Why is car insurance going up in the US in 2024?
Latest reports indicate that car insurance premiums have increased a whopping 26%, jumping from an average of $2,104 a year in 2023 to $2,545 this year.
Buying and then owning a car can turn out to be a pretty expensive endeavor: it does not only involve paying for the vehicle itself, you also have to deal with expenses that are part and parcel of car ownership, such as taxes, repairs, and insurance.
All these factors make owning cars more costly for the average person in the US. Auto insurance policies in particular comprise one aspect that has seen a heftier price tag in 2024.
According to personal finance website Bankrate, Americans have been paying an average of approximately $168 a month for car insurance. This is equivalent to an annual cost of about $2,000. However, that number is increasing significantly this year.
Average full coverage auto insurance premiums cost 26% more this year compared to 2023, jumping from $2,014 to $2,545 per year. Bankrate also reports that around 12.6% of all motorists are now driving without the benefit of car insurance, and this could result in even bigger costs even when you are insured. An accident with an uninsured driver can greatly increase your out-of-pocket expenses.
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Why is car insurance going up in the US in 2024?
Insurance companies take many factors into account when determining the premium an automobile owner needs to pay each year.
Whether you live in an urban or a rural area can affect your policy, for example, because driving in a big city increases your chances of getting into an accident with more cars on the road.
One factor that played a big part in the higher cost of car insurance in 2024 is the increase in disaster-related claims last year. This means that areas that have experienced damage from floods, hail, tornadoes, or hurricanes because they are more prone to severe weather can expect to pay higher insurance premiums.
Aside from your location, other factors could also be affecting the price of your policy. Insurance companies could be taking into consideration details such as the type of vehicle you drive, your marital status, age, or even your gender and education, when determining how much to charge for car insurance.