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The cost of car insurance jumped more than 19% in 2023, according to the Consumer Price Index. This jump was driven by inflation, a labor and parts shortage and higher traffic fatalities. 

Not everyone has seen such a dramatic increase, but many have. A survey of 2,300 drivers conducted last year by CarInsurance.com, which is owned by Insure.com publisher QuinStreet, found that 57% of respondents experienced a rate increase last year and 32% said their rates had gone up 10% or more. 

In fact, residents in most states have seen double-digit increases in car insurance during the past few years as insurance companies raised their rates to meet rising expenses. 

S&P Global’s third-quarter 2023 report on personal auto rates found that Allstate was approved for a 33% hike in California. Geico was approved for a 31.6% increase in Washington, and Nationwide was approved to raise rates by 31.4% in Ohio. 

The hikes are prompting people to shop for new insurance coverage. The CarInsurance.com survey found that 49% of respondents had looked around and bought insurance from another carrier in the past 12 months. 

Survey respondents who shopped their coverage often ended up switching, with 31% moving to Allstate, 22% to Progressive, 19% to Geico, 17% to State Farm and 12% to USAA. 

Our recommendations

If your rates increased, you should explore how you can save on insurance. 

  • Shop around and see what other rates are out there: Many drivers who switch insurers say they’re paying 10% to 15% less. 
  • Take advantage of discounts: There are discounts for good students, careful drivers, loyal customers, and more. 
  • Consider raising your deductible: Doubling your deductible usually results in significantly lower rates.

Why is my car insurance so high?

A variety of factors have pushed up the cost of insurance — including inflation, higher new car prices, labor and parts shortages — as well as an uptick in accidents since the pandemic. 

“Bad driver behavior, more cars on the road, escalating catastrophes are all putting rising risk factors on an insurance collision course with pandemic supply chain and labor shortage challenges,” says Carole Walker, executive director of the Rocky Mountain Insurance Information Association, a group that represents property and casualty insurers. 

If you find yourself asking why your car insurance keeps going up – even if you didn’t have an accident or make a claim – here is a closer look at some of the factors that might be pushing up your rates: 

Inflation: Drivers blame inflation for the price increase with 43% of CarInsurance.com survey respondents claiming inflation was responsible for the rising rates.  

According to Insurance Information Institute (III) data, drivers are correct about inflation’s role in rate increases. III data show an 8.3% increase in vehicle parts and equipment costs and a 5.8% increase in the price of new vehicles from January 2022 to January 2023. The cumulative private auto replacement cost from 2019 to 2022 skyrocketed by 45.6%. Before the pandemic, the average annual increase in auto prices was 2.6%. 

Labor and parts shortages: The pandemic set in motion a labor and parts shortage in the automotive industry that still impacts the sector. Shortages lead to more expensive repairs, and those higher costs are passed on to policyholders through higher premiums. 

TechForce Foundation, a nonprofit that releases a Technician Supply and Demand report each year, found in 2021 that the overall number of collision technicians has fallen from around 160,000 in 2016 to about 153,000 in 2020. 

The report lists several reasons for the drop: 

  • Baby boomers are retiring. 
  • More transfers and turnover are occurring. 
  • New positions in the industry are creating demand for more than 19,000 new collision repair technicians. 

TechForce, in a December 2023 blog, noted the ongoing challenges: “Labor shortages were a hot topic in 2023. As many of our colleagues consider retirement, there are fewer entry-level technicians to fill these roles, creating a significant talent gap.” 

A lack of technicians has pushed up repair costs as repair shops have to pay more to attract technicians. 

With new and used cars in short supply, along with parts, this has a major impact on the costs to replace and time to repair vehicles, which adds up to increased insurance claims costs and higher insurance rates, Walker says. 

A shortage of parts often leads to longer repair times, forcing insurers to pay for a rental vehicle for longer. These costs eventually get passed on to policyholders. 

“The high price of high-tech in cars was already affecting repair costs, but these current extreme marketplace conditions have pushed insurers to increase premiums as they also try to keep up with spiking crashes and catastrophic events,” Walker says. “This is also complicated by a shortage of rental cars and longer time in a rental after a crash due to lengthier repair and replacement times.” 

Traffic deaths: The pandemic reversed decades of traffic death declines. Drivers engaged in more risky driving behaviors with the rates of speeding, DUIs and distracted driving all up since the pandemic. 

Data from the National Highway Traffic Safety Administration (NHTSA) show that in 2020, an estimated 38,824 people died in traffic crashes – the highest number of fatalities since 2007. The NHTSA then estimated 42,915 people were killed in motor vehicle traffic crashes in 2021 and 42,795 in 2022

Accidents that involve bodily injury claims and fatalities tend to be more expensive than a fender bender as attorneys and the court system are often involved which leads to higher costs for insurers. Those higher costs get passed on to policyholders via higher premiums. 

Personal history and driving skills also affect rates

In addition to the above, individual factors affect your rates, such as tickets, accidents and your age. 

Accidents and tickets: If you have an accident or a speeding ticket on your record, you will always pay more for coverage than a driver with a clean record. Insurance companies view drivers with infractions on their records as a bigger risk and charge a higher premium to offset that risk. 

Major moving violations such as a DUI or reckless driving can result in a shocking increase to your premium or even prevent you from finding coverage at all. According to Carinsurance.com data: 

  • Rates can jump 26% to 43% for a speeding ticket and after an accident you may be looking at an average increase of 30%.  
  • Rate increases after a DUI can range anywhere from 40% to 90% or more.

Accidents also can significantly affect your rates. You can expect a hike of about 25% to 30% after a crash. But exactly how much your insurer will raise your rate after an accident will depend on where you live, the accident and other factors. 

The table below shows average state rates for a 40-year-old driver of a Honda Accord LX and how much those rates will increase for different accidents.

StateRate before accidentRates after 1 at-fault accident (property damage)Rates after 1 at-fault accident (bodily injury)Rates after 2 at-fault accidents (property damage)
Alaska$1,288 $1,880 $1,880 $2,525
Alabama$1,517 $2,242 $2,250 $3,094
Arkansas$1,483 $2,310 $2,318 $3,174
Arizona$1,661 $2,505 $2,599 $3,451
California$2,206 $3,692 $4,416 $5,664
Colorado$1,977 $2,757 $2,757 $3,678
Connecticut$1,455 $2,191 $2,210 $3,123
District of Columbia$1,904 $2,784 $2,810 $3,786
Delaware$1,751 $2,398 $2,442 $3,471
Florida$3,008 $4,384 $4,402 $5,718
Georgia$1,618 $2,576 $2,576 $3,487
Hawaii$1,309 $1,841 $1,841 $2,628
Iowa$1,241 $1,732 $1,737 $2,307
Idaho$1,011 $1,376 $1,419 $1,816
Illinois$1,364 $2,081 $2,086 $2,958
Indiana$1,282 $2,000 $2,007 $2,947
Kansas$1,493 $2,013 $2,049 $2,751
Kentucky$1,865 $2,801 $2,812 $3,954
Louisiana$3,197 $5,164 $5,164 $6,911
Massachusetts$1,760 $2,694 $2,706 $3,747
Maryland$1,966 $3,069 $3,079 $4,001
Maine$1,049 $1,557 $1,563 $2,099
Michigan$4,013 $5,767 $5,767 $10,372
Minnesota$1,686 $2,358 $2,369 $3,400
Missouri$2,372 $3,767 $3,773 $4,949
Mississippi$1,405 $2,081 $2,110 $2,781
Montana$1,766 $2,544 $2,544 $3,324
North Carolina$1,396 $2,194 $2,696 $2,851
North Dakota$1,232 $1,671 $1,701 $2,364
Nebraska$1,847 $2,623 $2,623 $3,501
New Hampshire$952 $1,367 $1,445 $1,995
New Jersey$2,262 $4,041 $4,060 $5,631
New Mexico$1,695 $2,328 $2,328 $3,047
Nevada$2,389 $3,561 $3,660 $4,845
New York$1,867 $2,288 $2,583 $3,330
Ohio$1,114 $1,674 $1,680 $2,307
Oklahoma$1,852 $2,812 $2,812 $3,786
Oregon$1,502 $2,281 $2,298 $3,103
Pennsylvania$1,297 $1,610 $1,874 $2,538
Rhode Island$1,792 $1,880 $2,372 $1,930
South Carolina$1,811 $2,588 $2,603 $3,360
South Dakota$1,558 $2,159 $2,349 $3,227
Tennessee$1,311 $2,033 $2,041 $2,770
Texas$1,981 $3,261 $3,239 $4,582
Utah$1,601 $2,373 $2,373 $3,475
Virginia$1,228 $1,841 $1,852 $2,670
Vermont$1,057 $1,521 $1,521 $1,967
Washington$1,351 $1,906 $1,920 $3,004
Wisconsin$1,573 $2,399 $2,404 $3,447
West Virginia$1,424 $2,090 $2,090 $2,817
Wyoming$1,763 $2,318 $2,318 $3,030

Adding a second car, or multiple vehicles, to your insurance policy: If you bought a second or third car, you need to add those vehicles to your policy. The cost of the second or third car will depend on the cars, the drivers, where you live and other factors. But you’re not likely to pay the same for the second and third car as you did for the first vehicle you insured – especially since insurers offer multi-vehicle discounts. 

Where you live: Insurance rates vary greatly – average state rates can range from a little more than $1,000 to more than $3,000. The highest rates can be found in Louisiana, Michigan, California and Florida (see chart below). If you move to a state with high rates, your premiums will increase. The 2023 rates below are based on a 40-year-old male driving a Honda Accord LX with 100/300/100 coverage and a $500 deductible.

State2020 rates2021 rates2022 rates2023 rates
Louisiana$2,352 $2,824 $2,255 $3,115
Michigan$3,132 $3,434 $2,201 $2,833
California$1,990 $1,947 $2,105 $2,669
Florida$2,356 $2,207 $2,356 $2,629
Colorado$1,878 $1,645 $1,904 $2,550
South Dakota$1,520 $1,768 $1,835 $2,467
Texas$1,865 $1,905 $1,827 $2,462
Kentucky$1,728 $1,414 $1,597 $2,378
District of Columbia$2,044 $1,971 $2,012 $2,311
Rhode Island$1,999 $1,872 $1,976 $2,285
Missouri$1,529 $2,059 $1,823 $2,244
Georgia$2,107 $1,736 $1,690 $2,235
Wyoming$1,858 $1,961 $2,048 $2,179
Tennessee$1,434 $1,269 $1,356 $2,174
Arkansas$1,688 $1,543 $1,636 $2,163
Nebraska$1,423 $1,543 $1,985 $2,158
Delaware$1,936 $1,540 $1,627 $2,117
New Mexico$1,590 $1,357 $1,442 $2,093
New Jersey$1,591 $1,393 $2,032 $2,089
Minnesota$1,550 $1,503 $1,550 $2,021
Montana$1,834 $1,771 $1,787 $2,013
Alabama$1,488 $1,403 $1,524 $2,009
Maryland$1,607 $1,492 $1,613 $1,988
Arizona$1,615 $1,342 $1,670 $1,982
South Carolina$1,516 $1,447 $1,519 $1,951
Pennsylvania$1,344 $1,094 $1,349 $1,950
Nevada$1,676 $1,469 $1,459 $1,935
Mississippi$1,616 $1,466 $1,491 $1,930
Oregon$1,413 $1,270 $1,321 $1,899
Massachusetts$1,318 $1,369 $1,416 $1,895
North Carolina$1,483 $1,525 $1,537 $1,893
Oklahoma$1,493 $1,430 $1,699 $1,889
Kansas$1,487 $1,484 $1,651 $1,881
Illinois$1,471 $1,244 $1,436 $1,852
Utah$1,341 $1,278 $1,556 $1,838
Washington$1,549 $1,244 $1,592 $1,784
Connecticut$1,846 $1,665 $1,480 $1,779
Iowa$1,184 $1,102 $1,324 $1,699
Indiana$1,214 $1,197 $1,399 $1,690
West Virginia$1,589 $1,381 $1,428 $1,667
Ohio$1,018 $939 $1,176 $1,609
North Dakota$1,330 $1,322 $1,390 $1,600
Alaska$1,449 $1,261 $1,303 $1,564
Wisconsin$1,085 $970 $1,182 $1,545
New Hampshire$1,044 $944 $1,029 $1,497
Idaho$1,087 $1,017 $1,176 $1,482
Virginia$1,154 $1,069 $1,328 $1,467
Vermont$1,391 $1,184 $1,218 $1,389
New York$1,402 $1,212 $1,133 $1,377
Hawaii$1,294 $1,269 $1,301 $1,346
Maine$997 $890 $993 $1,184

Age and gender: Insurers consider age and gender (in states that allow gender to be used for insurance rating) because reams of data show that young male drivers are involved in more accidents and file more claims. According to the California Department of Motor Vehicles, male and female drivers ages 16 to 19 have the highest average annual crash and traffic violation rates of any age group. 

If you recently added a teen to your policy, you can expect your policy to head up dramatically and, in many cases, it may double. 

Statistics show that males tend to drive more recklessly than females. So, if a teen male is in your household, you will pay more for coverage. Rates tend to level off as drivers hit their mid-20s and usually stay stable (assuming no tickets or accidents) until drivers hit their 70s when rates head up again.

Insight: Insurers use proprietary algorithms to set premiums. They look at your age, where you live, the car you drive, your driving history and more.

Older drivers tend to pay more for coverage because they are involved in more accidents. Slowing reaction times, medical conditions and even eyesight issues are more common with senior drivers, leading to accidents and higher insurance premiums. 

“One of the biggest factors adding to higher car insurance bills for seniors are common health problems that make them more prone to being hurt and incurring medical bills—even in low speed or less serious crashes,” Walker says. 

  • Adding a teen driver increases car insurance rates by an average of 161% according to Insure.com
  • Insure.com data shows that between the ages of 75 and 85, the average increase in car insurance costs is 24%, or roughly $350 a year

Your insurance company and where you live: Insurance companies use proprietary algorithms to assess your risk factors and set your premium, which can result in dramatic differences in premium quotes.

The table below shows the average rates for some major insurance companies and how they have increased over the last few years.

Company2020 rates2021 rates2022 rates2023 rates
Allstate$2,323 $2,327 $2,208 $2,603
Farmers$1,777 $1,890 $1,912 $2,331
Geico$1,221 $1,282 $1,319 $1,730
Nationwide$1,609 $1,438 $1,492 $1,770
Progressive$1,433 $1,105 $1,562 $2,027
State Farm$1,199 $1,055 $1,152 $1,466

Insurers also consider regional and local factors that can raise your premium regardless of whether your personal risk factors have changed.

Severe weather, wildfires, spiking crime rates and even local laws can impact the cost of coverage as insurers pass rising expenses onto policyholders via higher premiums. If your area has been impacted by a catastrophe (hurricane, wildfire) or even severe hail, there is a good chance your rates will be headed up, even if you didn’t file a claim. 

What can you do to lower your rates? 

If your premium increased recently, you have some options to help make it more affordable. 

Shop your coverage: Shopping around is one of the best ways to lower your premium. Insurance companies rate risk factors using proprietary software which can lead to dramatic differences in premium quotes. 

As mentioned earlier, a 2023 CarInsurance.com survey found that 49% of consumers had shopped their coverage in the past 12 months. The drivers who switched insurers racked up the savings with 29% saying they saved 15% by switching while 26% said they saved 10%. 

It’s best to shop your coverage every year, whenever you add a driver or a car or if your current insurer increases your rates. Always compare the same coverage levels and deductibles.   

Granted, not every company is suitable for every driver. To help you get a better idea of which company might best fit your needs, Insure.com does an annual ranking of the best auto insurance companies, rating the carriers by several different metrics.   

Explore discounts: All insurers offer policy discounts that can help keep your premium affordable. There are discounts for good students, careful drivers and loyal customers, as well as smaller discounts for getting your bills electronically and paying your premium in full. 

“Ask your insurer about all available discounts,” Walker advises. “Discounts are available for everything from vehicle safety to higher deductibles and bundling.” 

One major discount to ask about is bundling. If you have a homeowners or renters policy with the same insurance company, you should qualify for a bundling discount that can hit 25%. 

Change your coverages or levels: While lowering your coverage levels or dropping certain coverages will make your premium more affordable, it will also increase your chances of covering damages out of pocket. As crash levels rise, now may not be the time to cut back on coverage. 

“As crashing trends continue to spike, drivers need to protect themselves and not cut corners on insurance,” Walker says. “Buying optional uninsured/underinsured motorist, comprehensive and collision coverage, as well as adjusting liability limits on your policy are critical financial preparedness steps to take right now” 

Before making any drastic changes to your coverage levels, consult your agent to make sure your insurance coverage is appropriate for your needs. 

Sign up for usage-based insurance: Many insurers offer usage-based insurance (UBI), which uses a telemetric device or mobile app to collect data about your driving habits. These devices collect data related to miles driven, acceleration, braking and location. The data collected will vary by insurer. 

If the data shows you to be a safe driver, a discount will be applied to your policy. The discount amount will vary by insurance company and your personal data points. In most cases, an insurer will not raise your rates based on the data collected but some insurers may make sure you understand how the program works before signing up. 

Raise your deductible: Raising your deductible is a great way to lower your premium but always choose a deductible that you can easily afford if you have to make a claim on the policy. Doubling your deductible will usually result in significant savings. 

Look at payment options: While usually a smallish discount, paying in full for the year is a good strategy for lowering your premium. Most insurers offer discounts for paying yearly, bi-annually and even quarterly.  Some may offer a discount for setting up an automatic monthly payment. Check with your insurer for details.

Read more about the How to lower your auto insurance.
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What our expert says

Q: What’s a good way to save on car insurance?

expert-image
Carole WalkerExecutive director of the Rocky Mountain Insurance Information Association.
“Ask your insurer about all available discounts. Discounts are available for everything from vehicle safety to higher deductibles and bundling.”

Frequently asked questions

Why is my car insurance so high with a clean record? 

Insurance companies also consider factors that have nothing to do with your driving record and they can push up your rates. If you live in an area with a high crime rate or one that has seen significant weather or fire events in the last few years, your rates will most likely be headed up regardless of how carefully you drive.

Why did my insurance go up for no reason?

Insurers have to factor in inflation and higher repair costs when setting a premium, which is why many policyholders have seen rate increases in recent years. Weather or fire events that increase the risk factors in your area can often push up your rates even if you haven’t made a claim or gotten a ticket in the last year.

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Mark Vallet
Contributing Researcher

 
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Mark is a freelance journalist and analyst with over 15 years of experience covering the insurance industry.