Auto insurance premiums set to surge in 2024
Author: Mika Pangilinan
Original article here.
The new year is poised to deliver another jolt to American drivers, as insurers are expected to raise auto insurance premiums by an average of 12.6%.
According to ValuePenguin.com, a subsidiary of LendingTree, this projected hike is the steepest since 2018. It also comes on the heels of an 11.2% increase in 2023, signaling a persistent upward trajectory.
Forecasts from ValuePenguin’s State of Auto Insurance report additionally indicate a minimum 3% hike for every state in the US.
Nevada leads the pack with a projected 28% surge. Washington, Arizona, Connecticut, Louisiana, and Georgia also face substantial increases, ranging from 16% to 18%.
Furthermore, motorists with traffic violations are expected to see a 52% average increase in premiums.
Drivers in North Carolina, California, and Hawaii will face the most significant financial penalties, according to ValuePenguin, with violations and dangerous driving resulting in premium hikes exceeding 90%.
And while electric vehicle insurance is becoming more affordable in 2024, it remains 23% higher than coverage for traditional gasoline-powered cars. Tesla’s Model X, Model 3, and Model Y stand out with the highest insurance premiums, while the Honda CR-V and Ford F-150 emerge as the most economical choices.
Americans feel pressure of rising premiums
As the burden of auto insurance becomes increasingly challenging for Americans, 54% of policyholders told ValuePenguin that they are struggling to afford coverage.
Divya Sangameshwar, an insurance expert at ValuePenguin, said the situation is set to worsen in 2024, with the rate hike surpassing that of the previous year.
She added that Gen Z drivers will be disproportionately affected by the hikes, as they face a staggering 188% increase in car insurance costs compared to their older counterparts.
The factors behind these escalating premiums include the rising cost of car repairs and replacements, despite a slowdown in inflation.
Severe weather incidents in the past year have also led to a surge in insurance claims, prompting insurers to adjust rates to reflect increased weather-related risks.
Additionally, there has been a significant uptick in car thefts since 2022, including a 700% rise in catalytic converter thefts since 2019.
