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Car insurance projected to increase 5% after climbing 42% since 2022 

Rising vehicle repair costs — linked to high-tech and electric vehicles — fueled rate hikes in 2024; Climate change plays role.

Cambridge, Mass.—Car insurance rates increased by 15% in 2024, adding to the rising cost of car ownership. U.S. drivers now pay an average of $2,313 annually for full coverage, but rates in six states exceed $3,000 annually, Insurify data shows. 

Rising vehicle repair costs, linked to high-tech and electric vehicles (EVs), fueled rate hikes in 2024. Auto insurance companies are also increasingly factoring climate risk into their rates as insurers can incur significant losses from severe weather events. 

The cost of full coverage policies increased by 24% in 2023 in response to record underwriting losses of $33.1 billion in 2022. As the industry has recovered, rate increases have slowed. Average premiums decreased in 21 states in the second half of the year, according to Insurify data. 

Insurify’s data science team analyzed car insurance rates across the U.S. to determine where full-coverage premiums are rising fastest, which factors drove rate hikes, and what drivers can expect in 2025.

 Key Takeaways 

● After a sharp rise of 15% last year, full-coverage rate increases will slow to 5% in 2025, Insurify projects. By the end of the year, the average annual cost of full coverage will rise to $2,435. 

● Car insurance costs increased fastest in Minnesota, Maryland, California, Virginia and Pennsylvania with average rate hikes of 33% to 58% in 2024. Maryland drivers now pay the most for car insurance, with an average annual full-coverage premium of $4,060. 

● Full-coverage rates will rise by up to 10% in Florida, New York, Georgia, Nevada, and Delaware in 2025, according to Insurify projections. In the five states where rates are rising fastest, drivers already pay more than the national average ($2,313) for full coverage. 

● EV insurance costs for nine popular models rose by 28% in 2024, twice as fast as comparable gas-powered models, according to Insurify data. 

● EVs are now 24% more expensive to insure than comparable gas models, with an average annual full coverage cost of $3,430. 

Car insurance rates rose by an average of 15% in 2024, but hikes slowed in the second half of the year, according to Insurify data. Rates continued to increase in 24 states and Washington, D.C., but remained stagnant or fell in the remaining states in the last half of the year. 

Slowing rate hikes will bring welcome financial relief for U.S. drivers, who saw full-coverage premiums increase by an average of 42% (from $1,633 to $2,313) between 2022 and 2024. Drivers in some states have felt the burden of rising insurance costs more than others.

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