Auto Insurance Rates Are Skyrocketing, Up Almost 14% Year Over Year

It is possible to save money, despite rising insurance rates.

Auto insurance rates have continued to rise, with a nearly 14% increase (13.72%) from 2022 to 2023. According to a recent report, the true cost of auto insurance this year is higher than ever before. With high inflation and the cost of living skyrocketing, it's no wonder so many drivers are looking for ways to lower their car insurance premiums. Here is what's causing the increases in auto insurance rates and how you can save on your car insurance.

What's driving the increases?

One of the causes for the rise in auto insurance rates is the increasing cost of parts and labor to make repairs. The cost of auto parts have gone up due to supply chain disruptions and the demand for auto technicians is five times higher than the supply. Additionally, more people have been getting into accidents, resulting in increased claims activity. Medical costs resulting from car accidents are also higher. This has caused insurers to raise their premiums in order to offset these increased costs.

Where are the biggest changes?

The biggest changes were seen primarily in states including Florida, Michigan, Nevada, Alaska, and Illinois. These states saw the greatest premium increase with double-digit increases from 2022 to 2023. Two states saw average premiums go down, New Jersey and Massachusetts. The average American spends about 3% of their income on car insurance.

New York, Florida, Louisiania, Kentucky, and Alaska have the highest percentage of average income spent on a full coverage car insurance policy. These states have either a high number of cars, or are in states with a higher chance of natural disasters. Maine, Vermont, New Hampshire, Idaho, and Connecticut have the lowest.

How can drivers save on auto insurance?

Although it may seem like you're stuck paying high rates for your car insurance, there are still ways drivers can save money on premium costs. One of the best ways is to shop around and compare quotes from different insurers to get a better rate for coverage. Additionally, it's worth it for drivers to look into any discounts offered by insurers, such as safe driver discounts or student discounts. Qualifying for these could help drivers further reduce their costs.

Other discounts such as low mileage or work from home discounts are also available depending on your circumstances, so be sure to ask about those as well. For those who don't drive much at all, getting a pay-per-mile auto insurance policy may save more than $1,000 per year.

The cost of auto insurance continues to rise each year, making it increasingly difficult for many drivers to afford their coverage. Fortunately, there are still ways to save money on car insurance, such as shopping around and looking into any discounts (such as those for safe drivers or current students) offered by insurers. By following these steps, you can ensure that you're getting the best rate possible despite rising costs.