Experts Predict How High Car Insurance Prices Will Rise This Year
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Auto insurance premiums have risen faster than nearly every other common consumer cost, and painful price hikes are likely to continue in 2024.
The consumer price index (CPI) shows that prices for car insurance are up 20.6% in the past year, far outpacing the overall inflation rate and exceeding the inflation rate for pretty much any other significant spending category.
Auto insurance costs have climbed because car prices shot up during the pandemic — meaning that vehicles are more costly to replace or repair if they're damaged in accidents. Dangerous driving behavior increased as well, leading to more claims and more severe claims. Insurance companies need to pass these costs along to their customers, but it often takes a long time to get rate increases approved by state regulators.
This lag is one of the reasons auto insurance prices are still soaring even though inflation is easing in general.
“A lot of the big rate increases were kind of delayed from 2020 on to 2024, and then ultimately we're seeing those now,” says Sean Scaturro, advice director at USAA.
