If you’ve noticed your car insurance costs have gone up, you’re not alone. In the past year, labor shortages, inflation, and inclement weather have contributed to a 19.1% increase in insurance costs nationwide—but changes in your driver profile might also impact the cost of your car insurance.
1. Inflation
According to Jerry’s 2024 “State of the American Driver” study, the cost of auto insurance rose by 19.1% in 2023. Inflation was a major factor in this—as the cost of medical care and vehicle repairs rises, auto insurance claims get more expensive, and insurance companies pass the increased costs on to consumers in the form of rate hikes.
Industry experts expect insurance costs to remain high through 2024, so it’s likely that most drivers will see their car insurance premiums go up yet again at their next policy renewal.
2. Supply and labor shortages
The pandemic created significant supply chain issues worldwide, leading to shortages of replacement parts and a decreased number of vehicle repair technicians—two problems people still deal with today.
The National Automobile Dealers Association (NADA) estimates that there is still an annual shortage of nearly 40,000 auto repair technicians.1
Combined, these factors create the perfect storm for high repair costs2—and subsequently, more expensive auto insurance claims.
Learn more: Why is my car insurance so high?
3. Adverse weather
You may notice higher rates if you live in an area that’s prone to natural disasters. Auto insurance companies charge more in these areas because there’s a higher risk that they’ll have to pay widespread claims.
Some states are already seeing the effects of this. According to FEMA3, California, Texas, and Florida have seen the highest number of natural disasters in the last 20 years—mainly due to wildfires. Some car insurance companies have actually pulled out of these states entirely, and they cite severe weather as one of the main causes.4
As a result, insurance rates have been rising faster in these states when compared to the nationwide average. Our experts analyzed policies purchased by our customers to see just how much motorists in these areas pay for insurance coverage.
| Coverage type | California | Florida | Texas | United States |
|---|---|---|---|---|
| State minimum | $66 | $174 | $85 | $77 |
| Full coverage | $200 | $312 | $198 | $165 |
But it isn’t only these states that are affected by higher insurance costs. As natural disasters increase nationwide, it impacts rates everywhere.
4. Driving Record
While you probably know that your rates may go up significantly after a serious violation or an at-fault accident, you might not realize that insurance companies will sometimes raise your premiums after minor infractions or not-at-fault accidents, as well.
Any violations or claims can cause your insurer to consider you more likely to file a claim in the future and raise your rates to compensate for that increased risk.
Based on our experts’ analysis, this is how much insurance rates can go up if you’ve been charged with one of the following traffic violations.
| Violation | Monthly coverage cost | Rate increase (%) |
|---|---|---|
| Failure to wear seatbelt | $186 | 17% |
| Failure to use signal | $204 | 29% |
| Improper cell phone use | $218 | 38% |
| Speeding 1–10 mph over limit | $222 | 40% |
| Failure to obey signal | $245 | 60% |
| Speeding 11–20 mph over limit | $254 | 61% |
| Careless driving | $259 | 63% |
| Speeding 21+ mph over limit | $264 | 67% |
| DUI/DWI | $272 | 72% |
5. Credit score
If your credit score has dropped recently, you may have noticed that your insurance rates have gone up. In all but four states (California, Hawaii, Massachusetts, and Michigan), your credit history can play a large part in how much you pay for car insurance.
Data shows that drivers with a lower credit score are statistically more likely to file an insurance claim5, which is why rates are higher based on scores. Because of this, those with lower credit scores pay far more for car insurance—sometimes by more than 200%.6
According to our data, here’s how much Jerry users were charged on average for car insurance based on their credit score.
| Credit score | Monthly coverage cost |
|---|---|
| <600 | $223 |
| 601-699 | $186 |
| 700+ | $147 |
6. Your car
If you’ve recently purchased a new car, or added another vehicle to your policy, you may have seen an increase in your rates. New cars tend to come with upgraded interiors, better parts, and high cost of repairs, which often makes them more expensive to insure than an older model.
But even if you haven’t changed vehicles, your car could still be a factor in why your insurance rates have gone up. Vehicles prone to theft are prime targets for higher premiums—and motor vehicle theft is a worsening problem. In the first half of 2023, there were nearly 34% more vehicle thefts than in the first half of 2022.7
An increase in rates isn’t the only problem either. Big name companies have stopped offering insurance coverage altogether on certain vehicle models that are more susceptible to theft—namely Kia and Hyundai.8
7. Location
Location can play a huge role in how much you pay for a car insurance policy, so if you’ve recently moved, you may have noticed an increase in your premiums. For example, motorists in heavily populated cities like the Bronx, Los Angeles, or South Palm Beach, FL will see heftier bills than someone in a smaller town.
- Larger cities have more traffic, which means a greater chance for accidents.
- Drivers in urban areas are more prone to be victims of motor vehicle theft and vandalism—and insurance providers take note of that.
Our experts analyzed the cost of car insurance in cities with high and low population densities to see the impact on auto insurance premiums:
| Location (population per sq. mi.) | Monthly minimum coverage cost | Monthly full coverage cost | Percent change from average rate |
|---|---|---|---|
| Guttenberg, NJ (59,306) | $156 | $231 | 60% |
| New York, NY (29,303) | $261 | $409 | 177% |
| San Francisco, CA (18,629) | $93 | $273 | 51% |
| Kansas City, MO (1,615) | $85 | $201 | 18% |
| Nashville, TN (1,449) | $35 | $185 | -9% |
| Oklahoma City, OK (1,124) | $75 | $163 | -2% |
Population density data taken from census.gov.
KEEP IN MIND
If car thefts skyrocketed in your area or there has been a much higher rate of claims, your rates may go up even if you haven’t moved.
8. Age
If you recently turned 65, you may have noticed your car insurance premiums going up. That’s because teenagers and seniors pay some of the highest auto insurance rates across the nation. Not only are both groups more susceptible to car accidents, but senior drivers are more likely to suffer serious injuries in the event of a crash.
Rates tend to lower when younger motorists reach the age of 25. They’ll typically stay low for good drivers through middle age, then start to rise again once a driver reaches the age of 65.
Let’s take a look at how much different age groups pay for car insurance—and just how different those costs can be.
| Age | Monthly minimum coverage cost | Monthly full coverage cost |
|---|---|---|
| <18 | $275 | $681 |
| 18-21 | $248 | $542 |
| 22-25 | $163 | $369 |
| 26-34 | $123 | $274 |
| 35-44 | $110 | $242 |
| 45-54 | $106 | $230 |
| 55-64 | $100 | $212 |
| 65+ | $106 | $214 |
Other factors
Several additional factors also impact car insurance costs, including:
- Adding new drivers. If you add a spouse with a spotty driving record or teenager to your policy their driving history could raise your rates—even if your record is clean.
- Changes in discounts. If you lose access to a car insurance discount, like a good driver or good student discount, your rates could climb as a result.
- Marital status. Married couples tend to pay less for car insurance, so if your marital status changes, your car insurance rates could change too.
How to lower your car insurance rates
While there are a lot of determining factors that go into your premium, finding affordable coverage doesn’t have to be impossible. There are several ways you can lower your rates.
- Discover car insurance discounts. Just about every provider has discounts for policyholders. Whether it be for bundling your renters or home insurance with an auto policy, or a good student discount for young drivers in good academic standing, speak with an insurance agent at your current provider to discuss eligibility.
- Work on your driving habits. When you maintain a clean driving record with no accidents or violations, providers take note of that and will reward you with lower costs. Use the Jerry app to track your driving and get personalized tips to improve your performance behind the wheel.
- Increase your deductible for collision or comprehensive coverage. If you have a full coverage policy, you can also increase your deductible to help lower rates. However, keep in mind that you should only raise it to a reasonable amount you’re comfortable paying.
Shop around
One of the best ways to find affordable insurance is to shop quotes from different providers. When you shop around, you have a better chance of finding the best coverage option for you—at the price you want.
Jerry takes the weight off your shoulders by shopping quotes for you. Once you download the app, all you need to do is answer a few simple questions and we’ll provide you with free insurance quotes from top companies.
Jerry also reshops every six months. If you notice that your insurance is going up, the app automatically checks for new rates each renewal to make sure you’re not overpaying.
FAQ
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Why did my car insurance go up when nothing changed?
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Why does my car insurance keep going up?
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Is there anything I can do to prevent my car insurance rates from going up?
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Does my credit score impact my car insurance?
Sources
- https://www.google.com/url?q=https://www.nada.org/nada/issues/service-technicians&sa=D&source=docs&ust=1710799734555561&usg=AOvVaw1FIdzgwiMSG0XdkXl-t4aq ↩︎
- https://www.google.com/url?q=https://www.bls.gov/news.release/pdf/cpi.pdf&sa=D&source=docs&ust=1710799734556914&usg=AOvVaw1MFfahCT3GOiDk6Jt3_sgf ↩︎
- https://www.google.com/url?q=https://www.fema.gov/data-visualization/disaster-declarations-states-and-counties&sa=D&source=docs&ust=1710860725646785&usg=AOvVaw3jpVywJqxZVq23P6qtQIZ3 ↩︎
- https://www.google.com/url?q=https://ktla.com/news/california/more-insurance-companies-announce-plans-to-leave-california/&sa=D&source=docs&ust=1710799734556562&usg=AOvVaw13GQ43zadcL0o9i89kPdbx ↩︎
- https://www.google.com/url?q=https://www.forbes.com/advisor/car-insurance/rate-increase-poor-credit/&sa=D&source=docs&ust=1710799734560783&usg=AOvVaw2rS985bEelol3weP8Lfh0W ↩︎
- https://www.google.com/url?q=https://consumerfed.org/wp-content/uploads/2023/07/Official-CFA-Credit-Score_2023-FINAL-REPORT.pdf&sa=D&source=docs&ust=1710799734561528&usg=AOvVaw3MRu7TQUekS6a6liQQsflL ↩︎
- https://www.google.com/url?q=https://counciloncj.org/mid-year-2023-crime-trends/&sa=D&source=docs&ust=1710799734557840&usg=AOvVaw1VbbGFogKxW_S05E1AkiGv ↩︎
- https://www.google.com/url?q=https://www.forbes.com/advisor/car-insurance/car-thefts-spike/&sa=D&source=docs&ust=1710799734558355&usg=AOvVaw1cntaxopKexY-CY05HeP8H ↩︎
Maria is an insurance writer with over 10 years of experience as a professional writer. Prior to joining Jerry’s editorial team in 2023, she worked at various online publications like Nimble Media, Factinate.com, and served as editor-in-chief at The Medium. She holds a double major in English and Professional Writing and Communications.
Sarah Gray is an insurance writer with nearly a decade of experience in publishing and writing. Sarah specializes in writing articles that educate car owners and buyers on the full scope of car ownership—from shopping for and buying a new car to scrapping one that’s breathed its last and everything in between. Sarah has authored over 1,500 articles for Jerry on topics ranging from first-time buyer programs to how to get a salvage title for a totaled car. Prior to joining Jerry, Sarah was a full-time professor of English literature and composition with multiple academic writing publications.
