Originally published in Headlines & Global News
Car owners in three states are expected to get sticker shock this year when their insurance policies are renewed.
Insurance marketplace website Insurify said California, Missouri and Minnesota could see insurance rates spike more than 50% in 2024.
Damage from severe storms and wildfires contributes to rising rates in the states.
Another factor affecting California rates is car thefts. The National Insurance Crime Bureau says the state had the most vehicle thefts in 2023.
The state has also been behind other states in approving rate increases.
"During COVID-19 shutdowns, states like California put a freeze on rate increases. That's why so many people saw drastic rate hikes in 2023 after those restrictions were lifted," said Mallory Mooney, director of sales and service at Insurify. "Insurers are still playing catch-up, and it's too little too late for a lot of them. Insurers have had to pull out of some markets completely."
Nationally, the cost of full-coverage car insurance increased by 15% in the first half of the year. Insurify noted that costs have risen despite industry expert predictions that rate hikes could slow in 2024.
The average annual full-coverage premium now costs $2,329.
Increasingly severe and frequent weather events are driving up auto insurance premiums. Hail-related auto claims represented nearly 12% of all comprehensive claims in 2023, up from 9% in 2020, according to CCC Intelligent Solutions.
Maryland has the highest car insurance costs in the U.S., with an average full-coverage rate of $3,400 annually. The state saw an 8% increase in traffic deaths in 2023.
New Hampshire drivers pay the least, at an average of $1,000 annually.
Vehicle maintenance and repair costs have increased by nearly 38% over the past five years, according to the Bureau of Labor Statistics Consumer Price Index. Higher repair costs mean insurers pay more expensive claims and policyholders see higher premium hikes.
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