The average cost of full-coverage car insurance is projected to rise by 7% in 2024, after a year of rate hikes, according to Insurify’s 2024 “Insuring the American Driver” report.
Data sourced directly from Insurify showed that the average cost for a full-coverage car insurance policy rose to $2,019 last year — a 24% increase — as insurance companies grappled with profitability amid supply chain issues and climate change.
“A bit of the pressure is lifting. Drivers can expect some industry stabilization as we enter the second half of 2024,” says Betsy Stella, vice president of carrier management and operations at Insurify.
Findings also show that lower-income states are feeling the price hikes more severely. Out of the top 15 states paying the highest proportion of car insurance premiums relative to income, only four have a median household income over the U.S. average, according to Insurify.
For example, drivers in Mississippi, the lowest-income state in the country, spend 3.4% of their income on car insurance. In comparison, residents of Utah, which has nearly double the median income of Mississippi, spend only 1.8% of their income on car insurance.
The report also reveals:
- Car insurance rates increased 638% more than wages increased on average in 2023.
- 62% of Americans reported their car insurance rates increased in 2023, with 22% reporting their rates increased more than once.
- 45% of drivers surveyed reported they didn’t take any steps to reduce their premiums, despite seeing rate increases.
- New York is the state with the most expensive car insurance premiums in the country, with the average full-coverage policy costing $3,374 a year— 67% higher than the national average.
- Increasing deductibles and lowering coverage limits are the most popular ways drivers cut costs.
The report features findings from Insurify’s database of more than 97 million car insurance quotes from partnering insurance companies, as well as Insurify’s survey of 1,900 drivers across the country.
