Drivers across the United States are bracing for significant increases in auto insurance premiums this year, with some states expected to see hikes as high as 50%. According to recent projections, the average annual cost of full coverage car insurance is set to rise by 22% nationwide, with certain states experiencing even more dramatic surges.
In 2024, the average cost of full coverage auto insurance is expected to reach $2,469, up from $2,329 at the beginning of the year. The states expected to bear the brunt of these increases include California, Missouri, and Maryland, where premiums could climb by more than 50%. This sharp rise continues the trend from previous years, driven by various economic and environmental factors.
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Several key factors are contributing to these steep increases in auto insurance premiums. First, the cost of vehicle repairs and replacements has surged due to ongoing supply chain disruptions and the rising cost of car parts. Despite a slowdown in inflation, these costs remain elevated, forcing insurers to raise rates.
Additionally, severe weather events, such as hailstorms and hurricanes, have led to a surge in insurance claims, particularly in coastal and storm-prone states. This has prompted insurers to adjust their premiums to reflect the increased risk of damage.
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Moreover, the increasing frequency of car thefts, especially the targeting of specific models like Kias and Hyundais, has further exacerbated the situation. A significant rise in catalytic converter thefts, which has spiked by 700% since 2019, also contributes to the higher rates
While the national average paints a grim picture, the impact on individual states varies widely. For example, California drivers might see their annual premiums exceed $2,681 by the end of the year, while in states like New York and Florida, costs could approach or surpass $3,500.
On the other hand, states like New Hampshire and Maine are expected to see more modest increases, keeping their premiums among the lowest in the country.
Young drivers, particularly those from Generation Z, are likely to be disproportionately affected by these premium hikes. Insurance for these younger drivers could rise by as much as 188% compared to older, more experienced drivers.
