Auto insurance premiums are expected to rise across the country this year, already rising 24%, adding another wrinkle to the difficulties in keeping up with inflation.
According to data released by the Labor Department last week, auto insurance rates rose more than 20% than they were last year at this time.
While rising six times faster than consumer prices, insurance premiums outpaced the rate of inflation.
A report from Insurify doubled down on the Labor Department data, finding that in 2023, the average US rate for full auto coverage rose to $2,019 a year, up 24% from the $1,633 seen in 2022.
For a bare-bones policy on an automobile, Americans paid $1,154 in 2023, another rate that rose throughout the calendar year.
When it comes to why insurance premiums are rising, more expensive vehicles, lingering pandemic issues, a shortage of mechanics, and costlier parts have all played a part, according to a report from CBS News.
The Wall Street Journal reported that price hikes in New Jersey, New York, and California came after Allstate threatened to stop insuring drivers from the states due to reported heavy losses. Now, Allstate has increased rates on average by 17% in New Jersey, 15% in New York, and 30% in California.
Now, New York sits as the priciest state on average, with drivers paying around $281 per month on average for full coverage. Rounding out the top is Nevada at $240 per month, Florida at $243 per month, Delaware at $234 per month, and Louisiana at $233 per month.
With inflation still playing a major role in the economy and the Federal Reserve’s decision to cut key interest rates, prices may stay where they are or climb for the foreseeable future.