Sticker shock

Insurance costs — for both car and homeowners coverage — are up significantly across the country adding to Americans' financial stresses since the pandemic and ensuing inflation wave.

The average homeowners insurance premium nationally currently stands at $2,270 annually, according to financial firm BankRate LLC.

In Florida, the average premium costs $5,531 per year, That's the most expensive in the country.

In 2019 (before COVID and the post-pandemic inflation wave), the average homeowners insurance policy cost $1,272 nationally, according to business consulting firm Capco.

That's a 78% increase nationaly since the pandemic.

Car insurance premiums are also up across the country since the post-pandemic spike in prices.

In 2019, annual car insurance premiums averaged $1,470, according to a market analysis by insurance portal TheZebra.com. Now, they average $2,329 nationally — a 58% increase.

The cost of car insurance has gone up even more since before the coronavirus pandemic — including in New York, North Carolina, Florida and Maryland.

Last month, the U.S. Bureau of Labor Statistics reported car insurance prices were up 19.5% from July 2023. BLS reports motor vehicle insurance has had a 47% inflation rate since the end of 2019.

That's almost double the stressful 22% inflation rate in the U.S. since the end of 2019, according to BLS.

So, what's driving the rise in insurance premiums?

R.E. Hawley, a writer with Bankrate's research team, said wider inflationary trends and higher costs to repair homes and cars are helping drive premiums higher.

The average price of a new car is $48,644 — up 32% since 2019, according to Cox Automotive and TheZebra.com insurance information group.

Used car prices are up 27% since 2019, according to the two groups, with the average price of used vehicle sitting at more than $25,200.

More expensive cars have more expensive parts, repair and mechanic labor impacting both consumers and insurance companies paying accident and other damage claims.

"Rates are going up in every state. It's been going up for a few years," Hawley said.

Hawley also pointed to more extreme weather events cause more financial and property damage — which increases insurance claims and costs and in turn premiums.

"We're seeing increased wildfires in certain areas. We're seeing a lot of severe weather in areas that are not traditionally high risk," Hawley said who also pointed to more severe hurricanes and tropical storms.

Since 2019, the U.S. has seen 121 natural and weather disaster with damages price tag of $1 billion or more costing an estimated 667 billion, according to the U.S. National Centers for Environmental Information.

The warmer water in the Gulf of Mexico are not only perculating bigger and badder hurricanes, they are also part of the climate dynamics fostering more tornados and other storms in the Midwestern and Plains states,

Hawley said some states have seen increases insurance fraud and there have been contemporary and post-pandemic increases in distracted and dangerous driving contributing to higher insurance premiums.

"There's been an increase in risky driving," she said.

Mark Friedlander, director of corporate communications for the Insurance Information Institute, said higher costs of natural disasters have conspired with inflation — including higher repair and replacement costs — do drive up costs for insurers and in turn premiums.

He said worker shortages in construction and repair businesses have resulted in higher labor costs also putting upward pressures on insurers.

He also said "legal system abuse" helps drive up insurance costs via lawsuits and litigation.

Friedlander said replacement costs — such as materials and parts — shot up 55% during the post-COVID inflation wave — four times the inflation rate.

He also said more people are living in the paths of potential extreme weather events and natural disasters, pointing population growth in hurricane-prone Florida, Texas and the Carolinas as well as weather factors that have resulted in more tornadoes and wind storms in the Midwest.

There's also more people living near wildfire-prone areas of the Mountain West, Pacific Northwest and area of California.

"We are seeing more storms that are major loss events," said Friedlander, pointing to the high costs of hurricane and tropical storms and the increasing financial price tags of tornados and hail storms.

An increase in the number of uninsured drivers on U.S. roads can also translate into higher premiums.

According to the most recent numbers from Insurance Research Council, 14% of U.S. drivers are uninsured, acc up from 11.1% in 2019.

Car thefts and insurance fraud also contribute to how car insurance premiums are priced.

There were more than 1 million car thefts nationally in 2023, according to the National Insurance Crime Bureau. That is up from 794,000 in 2019 — a 29% jump. Auto thefts jumped 63% in Maryland and 64% in Washington D.C. between 2022 and 2023, according to NICB.

The insurance industry also blames a familiar foe for some of the rise in premiums — plaintiffs attorneys who specialize in accident claims and lawsuits. In Florida, and other states, the insurance industry has pressed for legal reforms to reduce high tides of litigation.