Auto insurance rates in the U.S. are set to surge by an average of 12.6%, the steepest increase since 2018, according to the comprehensive "State of Auto Insurance in 2024" report by ValuePenguin.com, a LendingTree subsidiary.
ValuePenguin's report details a concerning trend for motorists, with auto insurance premiums consistently climbing. The average annual cost of auto insurance is projected to hit $1,984 in 2024, a 29% increase since 2018. This trend is nationwide, affecting drivers in all 50 states.
Nevada leads the pack with a 28% rate increase, the highest in the country. Significant hikes are also anticipated in Washington state (18%), Arizona (17%), Connecticut (17%), Louisiana (16%) and Georgia (16%). On the flip side, states like Maine, New Hampshire and Idaho will enjoy relatively lower average premiums.
The report further highlights the financial impact on drivers with traffic violations. These motorists are facing an average premium jump of 52%, with those in North Carolina, California and Hawaii experiencing the most severe increases of over 90%.
In a positive note, insuring electric vehicles is becoming more affordable, though premiums for new EVs are still 23% higher than those for new gasoline-powered cars. Tesla's Model X, Model 3 and Model Y top the list of the highest insurance premiums in 2024, while the Honda CR-V and Ford F-150 emerge as the most economical options.
Divya Sangameshwar, an insurance expert at ValuePenguin.com, emphasized the growing financial strain, particularly on Gen Z drivers who will face a 188% higher insurance rate than older drivers in 2024. Sangameshwar pointed out that while inflation shows signs of slowing, the rising costs of car repairs or replacements, coupled with an increase in severe weather incidents and car thefts, including a 700% spike in catalytic converter thefts since 2019, are key factors driving these rate hikes.
In response to these challenges, ValuePenguin.com offers practical tips for drivers looking to mitigate the impact of these increases. Recommendations include comparing insurance quotes, exploring various discounts, adjusting coverage levels, and improving credit scores. These strategies have proven effective, with policyholders who shopped around in 2023 saving an average of $398 annually.
