Car insurance rates set to jump 7% in 2023
Study predicts another large increase
New car prices may finally be starting to level off again after a year of supply shortages, but the rise in insurance rates is expected to continue, according to a new report.
Online insurance marketplace Insurify is forecasting an average car insurance increase of 7% next year following this year's 9% spike.
That would bring the typical annual rate paid to $1,895.
"Our annual data reflects the state of the insurance industry, and our new report projects that higher driving rates, more severe accidents, inflation’s impact on vehicle repairs and medical costs, and the potentially increased frequency of wildfires and hurricanes will continue to be the key factors contributing to rate increases next year," Insurify CEO Snejina Zacharia said.
GAS PRICES AT STEEPEST DECLINE SINCE AUGUST: AAA
The study looked at 69 million insurance applications and found that 47% of policyholders had at least one rate increase this year, with nearly 20% reporting multiple hikes.
Car insurance rates were up 9% in 2022 as more drivers returned to the roads. (Mario Tama/Getty Images / Getty Images)
Oregon, Maryland and Virginia led the way, all seeing the average premium increase over 25%, but Michigan remains the most expensive state to insure a car in at $2,895, despite seeing just a 1% jump this year.
USED EVS STILL TOO EXPENSIVE COMPARED TO GAS, DIESEL VEHICLES: REPORT
Concerns about insurance prices rose from July to November as a decrease in gas prices meant people were worrying less about how much they were driving.
Insurance rates are expected to increase 7% in 2023. (Brian van der Brug / Los Angeles Times via Getty Images)
Hybrid and electric vehicle purchase consideration also dropped by 50% during the period.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Insurify suggests offsetting the higher insurance rates by taking common sense steps like choosing a more affordable vehicle that's cheaper to insure, shopping around for the best policy price and remembering to check for any discounts that you qualify for.