Auto Insurance Rates Expected to Spike by 15% This Year

Auto insurance costs are set to soar across the US, with full-coverage premiums already up 15% in the first half of the year, contrary to industry predictions of a slowdown.

Average Cost is Rising:

• Insurify, an auto insurance comparison site, reports a steady rise in US auto insurance costs since 2021.
• The average cost is predicted to hit $2,469 by year-end.
• California, Missouri, and Minnesota face rate surges of over 50% this year.

State Variations:

• Insurify's report attributes the surge to severe weather, wildfires, and state insurance laws.
• Legislative changes in Maryland and South Carolina could also contribute to higher premiums.
• Nationally, a 22% increase is expected by year-end.

No-Fault Systems Impact:

In these states, drivers file claims with their own insurance companies to receive compensation for their injuries, no matter which party caused the accident. No-fault systems are supposed to speed up claims but have also provided opportunities for insurance fraud. - Cassie Sheets, Insurify Data Journalist

Why the Rise?

• Repair Rates & Severity of Claims: USA TODAY notes that repair costs, severe weather, and auto thefts contribute to higher operational costs for insurers, passed on as higher premiums.
• As repair rates climb, insurers' costs rise, leading to higher premiums for policyholders.

To learn more about managing these rising costs, see USA TODAY's guidance on saving money and new car insurance quotes.