Revealed – how much more will Americans be paying for car insurance in 2023? | Insurance Business America
Americans will be paying almost $1,900 annually for car insurance in 2023, new data reveals.
Virtual insurance agent Insurify has released its Auto Insurance Trends report for 2022, which includes insight into what lies ahead for the industry in the coming year. Its outlook for 2023 was bleak, predicting that the average American driver will be paying 16% more for car insurance by the end of 2023 than they were at the beginning of 2022.
The Auto Insurance Trends report examined over 69 million car insurance rates from car insurance applications across the country before using this data to establish where costs peaked in 2022 and what insurance prices will be like next year.
Insurify found that car insurance rates increased by 9% over the course of 2022, a trend it expected to continue with another 7% rate growth in 2023 - leading to Americans paying $1,895 by the year end.
Car insurance cost the average driver $1,777 this year, representing not only a 9% increase from 2021 but a crushing 21% increase from car insurance rates in 2020.
State-by-state premium growth
Premiums rose by more than 25% in Oregon, Maryland, and Virginia – the biggest price growth across all states – while premiums fell by 15% in California this year. Insurify attributed the latter phenomenon to California’s continuing moratorium on rate increases, which has been in place since the start of the pandemic, although experts have begun to argue that the moratorium has severely dried the pool of available insurance options in the state.
Insurify’s annual report also surveyed a panel of insurance experts, who agreed that the biggest factors that would drive the insurance-cost hike throughout 2023 would be the rising cost of car repair and medical expenses, higher driving rates, higher accident rates, and the potential for more frequent natural disasters brought about by climate change.
“Many of the factors that contributed to rate increases in 2022 will continue to be in play for American drivers in 2023,” said Insurify’s CEO and founder Snejina Zacharia. “Our annual data reflects the state of the insurance industry, and our new report projects that higher driving rates, more severe accidents, inflation’s impact on vehicle repairs and medical costs, and the potentially increased frequency of wildfires and hurricanes will continue to be the key factors contributing to rate increases next year.”
Read more: Finding cheap car insurance, and how to lower your quote
Insurify’s annual report also kept tabs on American drivers, close to half (47%) of whom reported that their auto insurance rates increased at least once in 2022, while one in five (19%) reported their rates increased more than once this year.
The number of drivers considering purchasing an electric vehicle or hybrid one halved by November this year compared to July, although more of them were now considering changing insurance providers or even dropping their car insurance policies altogether despite knowing the risks of driving without coverage.
What are your thoughts on Insurify’s latest Auto Insurance Trends report? Let us know in the comments below.