Car insurance rates could jump 50% in these 3 states this year: study
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A combination of multiple factors, including climate-driven natural disasters, inflation and the soaring prices of new cars, among others, is projected to send premiums rocketing higher in 2024, according to a study by online insurance marketplace Insurify.
After rates climbed 15% nationwide in the first half of the year, Insurify projects coverage to spike 22% during 2024, but some states will be hit especially hard.
Thanks in part to severe storms and wildfire damage that resulted in massive payouts, three states are set to experience increases over 50%, the study found:
For companies that bundle home and auto insurance, for instance, widespread destruction from severe weather events – especially in areas that doesn't usually see it – can force insurers to raise costs, or even cancel policies.
Added to the ongoing rise in auto insurance premiums are car prices themselves, which shot up during the pandemic when supply chain issues choked the supply of new vehicles and the computer chips that go in them.
The average price of a new vehicle in July was
"The severity is really the thing that has influenced rates more over the last two years than anything,"
The increase in auto insurance premiums in 2024 is just the continuation of companies' rate hikes in 2023 (24% nationwide), according to Insurify.
Price increases for insurance rates, like many other increases from food to clothing, have been sticky and are less likely to drop at the same rate as broader inflation, if at all.
That has been beneficial for insurers who have seen profits surge.
The five states with the fastest-growing car insurance rates, according to Insurify, are:
In some states, costly auto insurance isn't a new thing. The data scientists behind the study looked at Insurify's "more than 97 million rates in its proprietary database" for drivers between 20 and 70 with clean records and found that the following five states will have the highest projected average premiums at the end of 2024:
The Associated Press contributed to this report.
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