Nevada, Washington, and New York OK’d the Most Auto Insurance Rate Hikes Since 2023 | Insurify

Car insurance rates don't just rise on their own. Insurers have to ask states for permission to increase rates. And some states approve those requests more frequently than others.

Regulators in Nevada, Washington, and New York approved the largest total amount of auto insurance rate increases over the last two years, according to S&P Global's U.S. Auto Insurance Market Report. In Nevada, that added up to 45.7% in total approved rate increases since the start of 2023.

During this "generational hard market," insurers have been seeking significant rate increases, S&P wrote in its report. Many factors influence car insurance costs, and each state's timeline for approving rate increases affects when those changes take effect, too.

Why do regulators keep approving rate increases?

The short answer is competition, but it starts with the many factors driving up the frequency and cost of auto insurance claims.

According to the Nevada Division of Insurance, factors contributing to rising auto insurance rates include:

Increased traffic levelsBad driving habitsRising cost of new and used vehiclesSupply chain issuesInflationInsurance fraudHigher medical costsLitigation and higher personal injury payouts

Fraud and personal injury litigation can increase costs for insurers, adding even more to the bottom line.

Whether or when auto insurers need to seek approval for rate increases varies by state as well. For example, Nevada has a prior-approval system for personal auto insurance rates, meaning insurers can only use state-approved rates.

But simply refusing to approve rate increases doesn't mean rates won't go up. And that's where competition comes in.

"[I]f insurers experience significant losses by charging rates they consider inadequate, some insurers may choose to tighten their eligibility guidelines, limit writings of new policies, non-renew existing business, or even leave the market altogether," the Nevada Division of Insurance wrote in a statement.

"If the Division does not approve appropriate rate increase requests, carriers could become unprofitable, which could lead to insolvency. The more likely scenario is that carriers will cease to write policies in Nevada, making the environment less competitive. Less competition could lead to higher rates."

The most expensive states for auto insurance

The states that approved the largest total rate increases in the last two years don't necessarily have the most expensive car insurance.

Maryland is the most expensive state for auto insurance, according to Insurify's auto insurance report. Its annual cost of full coverage passed $4,000 in 2024, and Insurify projects it will increase by another 5% in 2025. Maryland also made S&P's top 10 list for rate increases since regulators have approved 25.6% in auto rate increases since 2023.

Crime is partially to blame for the high rates in Maryland; the National Insurance Crime Bureau reported a 63% increase in car thefts in Maryland in 2023. But besides car theft, Maryland insurers also have to account for legislative changes requiring enhanced underinsured motorist coverage and increasing insurer payouts following an accident.

New York, Florida, and Nevada are also among the most expensive states for car insurance, and each approved some of the largest total rate increases since 2023, per Insurify data and S&P Global.

What's next: Cost increases are slowing down

Costs aren't skyrocketing everywhere. North Carolina has approved the lowest total auto rate increase of any state, according to S&P Global. The Tar Heel State has approved just 9.1% in total increases since 2023. Hawaii wasn't much higher, at 10.7%.

Numerous economic, regional, and individual factors continue to affect car insurance rates. Though rates surged in 2023 after significant underwriting losses in the insurance industry, rate increases have slowed. Insurify projects car insurance costs will increase another 5% in 2025, much lower than the 42% increase since 2022.

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