Car insurance is getting more expensive. The average annual premium for full coverage auto insurance in the U.S. rose to $2,543 in 2024 — up 26% from the previous year, according to Bankrate.
Factors such as longer repair times and more expensive rental car costs are resulting in rising prices, according to a report by the American Property Casualty Insurance Association.
Also, cars are becoming costlier to fix.
“In the past about 12 months we’re in an environment now where essentially all insurers have aggressively increased premiums,” said Stephen Crewdson, senior director of insurance business intelligence at J.D. Power. “That has led to an environment where the consumer, the insured, is out shopping for auto insurance and finding that they cannot find an insurer that has a lower premium for them.”
Around 215 million Americans carry auto insurance and the market is valued at roughly $353 billion, according to IBISWorld.
So, what other factors are behind the spike in auto insurance rates and what impact are rising premiums having on consumers and large publicly traded companies such as Allstate, Progressive and Berkshire Hathaway’s Geico?
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