Car insurance costs to keep rising in 2024 – pay less in these US states

Drivers can expect much of the same this year for car insurance, with premiums continuing to soar and shopping options still constrained by providers ducking out of certain markets, according to a recent report from the Zebra.

Drivers paid an average of $1841 to insure a car in 2023, or 5% more than they did the previous year. That comes after a 15% jump between 2022 and 2023. Unfortunately, according to the report, 2024 is likely to bring more of the same.

More of the same factors driving increases in the previous two years are pushing costs up this year. Inflation has impacted auto repair costs, and drivers are submitting bigger claims. Extreme weather continues to be a factor contributing to increasing costs, as well as rising car thefts. With no relief in sight, drivers can expect to pay more for insurance premiums.

"I can say rates are high due to the record amount of catastrophic weather events over the last few years," Hunter Black, an insurance agent at The Zebra said. "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."

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These states will see the biggest increases in 2024

Where you live can significantly impact how much you pay for insurance. For example, states that are more affected by climate-related disasters have seen a higher incidence of insurance providers pulling out or writing new policies, leaving buyers with fewer options for insurance shopping.

The make and model of a vehicle has also greatly impacted car insurance costs. Drivers of Kia and Hyundai cars have had difficulty insuring these vehicles because of the high incidence of theft of certain models.

Florida and Louisiana top the list of states with the highest annual premiums. Drivers here pay an average premium of over $2,700 per year. That's 47% more than the national average. Drivers in Vermont and Idaho pay the least, with annual premiums registering 35% below the national average. Drivers in 19 states now pay an average of more than $2,000 a year in auto insurance premiums.

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How you can save money on insurance

Americans won't get any relief from insurance prices in 2024, but drivers can still save money by looking for new opportunities to save with their current carrier or by switching. These are some other options to consider for keeping your auto insurance affordable:

• Compare quotes from at least four to five companies before picking a policy, and reevaluate your policy every six months to ensure it still covers your needs.
• Look into insurance discounts and savings. Policies that offer discounts for low-risk behaviors—such as AAA membership or taking a senior driving safety class—can help drivers lower their car insurance premiums. Alternatively, a telematics program can help drivers save based on their driving habits.
• Only pay for the coverage you want and need. Understanding what your policy covers is the first step towards determining if it covers your needs. All U.S. states, except New Hampshire, require liability coverage, according to Insurify. This covers injuries and property damage sustained by other parties when you cause an accident.

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