Rates set to rise by an average of 8.4%, the highest in 6 years, due to an increase in car repair costs and claims
New York—Insurers are expected to raise car insurance premiums by an average of 8.4% in 2023 after a slight 0.6% increase in 2022, according to ValuePenguin’s “State of Auto Insurance in 2023” report. The average cost of auto insurance is expected to reach $1,780 per year annually, and 45 states will see their car insurance premiums increase in 2023.
2023 Auto Insurance Rate Predictions:
- Auto insurance is expected to increase by 8.4% in 2023 with 45 states seeing their rates increase by at least 1%.
- The average cost of full coverage car insurance in 2023 is $1,780/year, with Michigan, Florida, and Rhode Island residents paying the highest premiums.
- Drivers with traffic violations in 2023 will see their premiums jump 52% on average.
- Car insurance for new electric vehicles will be 28% higher than new gasoline-powered cars. The Porsche Taycan ($3.576) and Tesla Model Y ($3,110) will have the highest insurance premiums in 2023 with the Honda CR-V as the cheapest car to insure in 2023.
Divya Sangameshwar, insurance expert at ValuePenguin.com, said millions of Americans may be surprised when they receive their 2023 statements. “This year’s auto insurance rate increase is the highest rate increase since 2017. After two years of keeping rates low for drivers, car insurance companies are raising rates in 2023 due to an increase in car repair costs and claims.”
Cost of car insurance by state
As insurers feel the pressure from inflation, car insurance premiums are set to rise with some states feeling it significantly more than others. Among the 45 states expected to see premiums increase, Illinois has the largest jump at 17% followed by Arizona (15.6%) and New Hampshire (13.6%). As in years past, Michigan will continue to see the most expensive premiums at $4,788 followed by Florida ($2,856) and Rhode Island ($2,7480). Traffic violations in North Carolina and California will cost the most. Violations in those states will increase premiums by more than 100%.
| State | Avg annual cost | % over average |
|---|---|---|
| Michigan | $4,788 | 168% |
| Florida | $2,856 | 60% |
| Rhode Island | $2,748 | 53% |
| Nevada | $2,592 | 45% |
| Louisiana | $2,376 | 33% |
| Massachusetts | $2,136 | 20% |
| Connecticut | $2,052 | 15% |
| Delaware | $2,052 | 15% |
| Kentucky | $2,040 | 14% |
| Colorado | $2,016 | 13% |
| Oklahoma | $1,956 | 9% |
| D.C. | $1,956 | 9% |
| Arizona | $1,920 | 7% |
| New Jersey | $1,908 | 7% |
| Hawaii | $1,872 | 5% |
| Missouri | $1,848 | 3% |
| Oregon | $1,824 | 2% |
| New York | $1,788 | 0% |
| South Dakota | $1,776 | -1% |
| California | $1,752 | -2% |
| Montana | $1,752 | -2% |
| Illinois | $1,728 | -3% |
| Maryland | $1,716 | -4% |
| Nebraska | $1,704 | -5% |
| Minnesota | $1,680 | -6% |
| Alabama | $1,668 | -7% |
| New Mexico | $1,668 | -7% |
| Arkansas | $1,656 | -7% |
| Kansas | $1,656 | -7% |
| North Dakota | $1,656 | -7% |
| Utah | $1,656 | -7% |
| South Carolina | $1,632 | -8% |
| Texas | $1,632 | -9% |
| West Virginia | $1,632 | -8% |
| Mississippi | $1,560 | -12% |
| New Hampshire | $1,560 | -13% |
| Washington | $1,536 | -14% |
| Iowa | $1,524 | -14% |
| Wyoming | $1,512 | -15% |
| Georgia | $1,500 | -16% |
| Pennsylvania | $1,488 | -17% |
| Virginia | $1,416 | -21% |
| Alaska | $1,404 | -21% |
| Tennessee | $1,356 | -24% |
| North Carolina | $1,308 | -27% |
| Ohio | $1,296 | -27% |
| Indiana | $1,272 | -28% |
| Wisconsin | $1,260 | -30% |
| Idaho | $1,188 | -34% |
| Maine | $1,116 | -37% |
| Vermont | $1,104 | -38% |
Cost of car insurance for top-selling cars
The cheapest new cars to insure tend to be crossover SUVs and sedans, while pickups and larger SUVs cost more to insure. Smaller sedans and midsize SUVs like the CR-V and RAV4 are typically cheaper to repair or replace than larger cars, so they’re typically cheaper to insure.
| Car model | Annual cost |
|---|---|
| Chevy Silverado | $2,551 |
| Jeep Grand Cherokee | $2,472 |
| GMC Sierra | $2,422 |
| Ford F-Series | $2,320 |
| Toyota Tacoma | $2,308 |
| Toyota Corolla | $2,186 |
| Toyota Camry | $2,139 |
| Ram Pickup | $2,135 |
| Toyota RAV4 | $2,057 |
| Honda CR-V | $1,900 |
Cost of car insurance for popular EVs
Electric cars are growing in popularity. The Mini Cooper Electric is one of the cheapest EVs to insure, while Teslas are some of the most expensive. The Porsche Taycan is one of the most expensive cars to insure, as it’s both a sports car and an EV.
| Car model | Annual cost |
|---|---|
| Porsche Taycan | $3,576 |
| Tesla Model Y | $3,110 |
| Polestar 2 | $2,468 |
| Hyundai Ioniq 5 | $2,425 |
| Rivian R1T | $2,340 |
| Ford Mustang Mach-E | $2,304 |
| Chevrolet Bolt EV | $2,148 |
| Nissan Leaf | $2,105 |
| Ford F-150 Lightning | $2,043 |
| Mini Cooper Electric | $1,917 |
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