Prepare For Post-Pandemic Auto Insurance Hikes

 Thursday, January 14, 2021


2020 wasn’t too dependable in the "good news" department, but one of its few silver linings was a near-universal decline in auto insurance premiums.

According to ValuePenguin’s 2021 "State of Auto Insurance" report, that reprieve will soon come to an end.

Those who saw big discounts and refunds in 2020 may be surprised to learn that the average cost of premiums nationwide only dropped about 1.7%, despite what the report authors described as an "unprecedented" drop in insurance claims.

Premiums have been climbing steadily over the past decade, making 2020 an aberration, but not a significant one. The nationwide average went up more than 7% in 2017, ending several years of consecutively larger premium hikes.

Even in the states with the highest average premiums, the average cost of insurance didn’t decrease substantially. Michigan, which has the highest premiums in the country by a huge margin (more than 3.5 times the national average; $7,406 vs. $1,636), only saw its rates drop 4.3%.