The year 2024 is shaping up to be financially challenging for American drivers, with auto insurance premiums expected to rise by an average of 12.6%. This increase, reported by ValuePenguin.com, a LendingTree subsidiary, marks the steepest rise since 2018, following a significant 11.2% hike in 2023. ValuePenguin’s State of Auto Insurance report reveals that every U.S. state will experience at least a 3% increase, with Nevada leading at a staggering 28%. Other states like Washington, Arizona, Connecticut, Louisiana, and Georgia are also facing hefty hikes, ranging from 16% to 18%.
This escalation means the average annual cost for auto insurance will reach approximately $1,984. States like Michigan, Florida, and Nevada will bear the brunt of the highest premiums, while Maine, New Hampshire, and Idaho enjoy the lowest rates. The report also highlights a concerning trend for motorists with traffic violations, who are expected to see a 52% average increase in their premiums. This is especially severe in North Carolina, California, and Hawaii, where penalties for violations could lead to premium increases exceeding 90%.
Additionally, the report touches on the cost of insuring electric vehicles, noting that while it’s becoming more affordable, it’s still 23% higher than traditional gasoline-powered cars. Tesla models, particularly the Model X, 3, and Y, are among the most expensive to insure. Conversely, the Honda CR-V and Ford F-150 are the most economical options.
The rising premiums are a significant burden for Americans, with 54% of policyholders struggling to afford coverage. Divya Sangameshwar, an insurance expert at ValuePenguin, suggests that these rate hikes are more severe than in the previous year, disproportionately impacting Gen Z drivers who face a 188% increase compared to older drivers. The driving forces behind these premium increases include the rising costs of car repairs and replacements, severe weather-related insurance claims, and a notable increase in car thefts, including a dramatic rise in catalytic converter thefts since 2019.