American drivers are braced for more increases in the premiums they’re paying on their auto policy.
Across the US, there were three states that experience car insurance price increases by 25 percent last year, and experts are cautioning American motorists that the premiums are expected to continue rising.
As much as auto premiums rose last year, 2023 is likely to see policies getting more expensive.
Interest rate increases, inflation, the volatility of gas prices, and a spectrum of other causes have sent car insurance rates skyward in the last year. This has left many drivers in the US struggling to afford to continue being behind the wheel. The bad news is that the policy premiums are only expecting to get higher this year, even after big jumps last year.
About 47 percent of drivers in the United States paid more for their coverage last year than they did the year before, according to a recent Insurify survey. Some drivers found that their premiums only rose by a negligible amount. However, there were drivers in three states in particularly that saw a 25 percent average increase on the bills they paid for their coverage every month.
Maryland, Oregon and Virginia experienced auto insurance rate increases of about 25 percent last year.
That said, drivers in Minnesota, Ohio, South Dakota, Tennessee, Utah and Wisconsin, while paying considerably more, did better than their counterparts in Maryland, Oregon in Virginia. Drivers in those six states paid between 20 and 25 percent more in 2022 than they had in 2021.
Industry experts are widely predicting that insurers will be continuing to increase their prices this year, so drivers should prepare themselves for having to face larger bills in order to keep up their car insurance coverage. The nationwide increase last year was 9 percent, bringing annual premiums to $1,777, though that varied broadly from state to state, according to Insurify’s data based on 69 million auto insurance quotes.
“There are two main ‘drivers’ for the spike in insurance rates: consumers are driving more, and cars are more expensive than ever to repair,” explained University of San Diego School of Business professor of finance Dan Roccato in a recent Yahoo Finance report. “It’s hard to see how this changes until we fix our inflation problem.”