Auto insurers in the United States are increasing the cost of their rates for 2023, due to the rising cost of repairs and claims for theft and accidents. Most drivers will pay more than in the last 6 years
The return to “normal” after almost three years of the COVID-19 pandemic, with the return to offices and other workplaces, as well as personal travel, is resulting in a considerable increase in car accidents and therefore in claims to insurance companies, which will increase the cost of their policies on average by 8.4% in 2023, the highest increase since 2017.
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That’s the prediction of the latest market study by ValuePenguin, which used the Quadrant Information Services database to analyze millions of quotes for US drivers and changes in the costs of their policies, whose average cost for full coverage is $1,780 per year.
Other factors for the rise in the cost of auto insurance policies is that new models, which include more technological equipment and luxury accessories, are increasingly expensive to repair and because spare parts are more and more hard to find due to short supplies or more expensive due to inflation.
In addition, the lack of availability of new and used cars has also increased the typical market value of many cars, which means that insurance companies are paying higher amounts for claims across the board.
According to the study, drivers in 45 of the 50 US states will see their rates increase by at least 1%, but those in Illinois will experience the largest rate increases with an average of 17%, followed by Arizona (15.6% ) and New Hampshire (13.6%).
In Michigan ($4,788), Florida ($2,856) and Rhode Island ($2,748) drivers will pay for the most comprehensive and expensive auto insurance coverage.
The cheapest insurance policy is offered for drivers in Vermont ($1,104), Maine ($1,116) and Idaho ($1,188), where the average cost is 36% cheaper, on average, than the national average.
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Insurance for popular cars and other risk factors
The cheapest new cars to insure tend to be SUVs and sedans, while trucks and larger SUVs cost more to insure. Smaller sedans and midsize SUVs like the Honda CR-V and Toyota RAV4 are often cheaper to repair or replace than larger models, so they’re often cheaper to insure.
Other factors that affect the cost of the car insurance policy are traffic violations, which can cause an increase of 52% on average in 2023. The penalties will be more severe and apply to drivers from North Carolina and California, where rates will increase more than 100%.
Nebraska auto insurance companies tend to be the most lenient towards drivers with imperfect driving records, with rates “only” increasing by 35% on average.
For the entire country, the offense that causes the largest increase in auto insurance policy (84% on average) is driving under the influence of alcohol or prohibited substances (DIU), in addition to the cost average for fines, legal costs and driving restrictions that can range from $500 to $15,000, depending on the laws of each state.
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Hidden EV Costs
Although electric cars require less maintenance compared to gasoline-powered ones, their repair cost is usually much higher and therefore the insurance policy for new electric vehicles will be on average 28% more expensive than that of an electric car. Affordable new model with gasoline engine.
For now, the MINI Cooper SE is one of the cheapest to insure, while insurance policies for Tesla models are some of the most expensive, although the Porsche Taycan is one of the most expensive cars to insure, as which in addition to being electric, is also classified as a sports car.
Tips to save on auto insurance in 2023
1- Compare quotes from various insurers
The most important part of shopping for auto insurance is comparing quotes from multiple companies. Quotes can vary by hundreds of dollars between companies, even for the same driver.
2- Look for all available discounts
Insurance companies offer many discounts to help you lower your rates. With the rise of remote work, many companies are offering discounts or lower rates for driving less. Pay-per-mile car insurance can lower rates even more for low-mileage drivers.
3- Adjust the level of coverage
Switching from full to minimal coverage is a great way to save a significant amount on your auto insurance premiums if you don’t have an outstanding loan or luxury car. Comprehensive coverage is 157% more expensive than liability-only coverage. Eliminating optional coverages like roadside assistance can also reduce the cost of your policy.
4- Improve your credit record
Insurance companies in most states evaluate your credit history as a factor in insurance rates. The difference between a good and bad credit score can change premiums by 80%, since people with bad credit are more likely to file auto insurance claims.