Why did my car insurance go up?
You may have noticed that you pay more for auto insurance lately than in previous years. There are several possible reasons behind this trend.
The main factors are:
- Inflation. The post-pandemic years saw inflation rise across the board, and that inflation hit insurance companies due to the increased cost of parts for repairs. That led to increases in insurance rates to cover those parts.
- Increased repair costs. Inflation isn't the only thing driving up the cost to repair cars. As vehicles include more technology, like sensors and cameras, the cost to replace damaged parts also becomes more expensive.
- Longer repair times due to parts shortages. Supply chain disruptions that came out of the pandemic are still affecting the auto industry. As it takes longer to obtain parts, claims drag out and insurance companies pay more for rental cars and labor.
- Litigation. In some areas, particularly Florida, insurance rates are affected by the high cost of litigation, with lawsuits costing insurance companies both in court costs and settlements.
- Natural disasters. Floods, wildfires and severe storms have all resulted in more car insurance claims.
Car insurance cost trend 2022-2025
Car insurance rates have climbed steadily over the past few years, with the average monthly rate climbing from $140 in 2022 to $209 in 2025.
| Year | Average annual premium | Average monthly premiums |
|---|---|---|
| 2022 | $1,682 | $140 |
| 2023 | $1,897 | $158 |
| 2025 | $2,513 | $209 |
Car insurance cost trend by company
All of the major car insurance companies have increased their average rates over the past few years, but some more than others. In 2023, six of the 10 major carriers below offered an average rate that was under $2,000 a year. In 2025, USAA is the only major carrierAn insurance carrier is the company that provides your car insurance policy and pays claims. with an average that still falls under $2,000, and it's only open to military families.
| Company | Average annual car insurance costs 2022 | Average annual car insurance costs 2023 | Average annual car insurance costs 2025 |
|---|---|---|---|
| Allstate | $2,086 | $2,509 | $3,205 |
| Farmers | $2,021 | $2,387 | $3,085 |
| GEICO | $1,266 | $1,763 | $2,148 |
| Nationwide | $1,191 | $1,548 | $2,463 |
| Progressive | $1,711 | $1,998 | $2,675 |
| State Farm | $1,436 | $1,984 | $2,874 |
| Travelers | $1,474 | $1,606 | $2,103 |
| USAA | $1,181 | $1,381 | $1,572 |
Car insurance rate increases by state
Car insurance rates have increased in every state since 2023, but some have been hit harder than others. Alabama, Hawaii, and Wyoming rates increased an average of 13%, the smallest increase, while Washington, D.C. saw rates increase the most at 57%, followed by New York at 55%.
See how much rates have gone up in your state below.
What factors determine how much you pay for auto insurance?
Many determinants impact what you are charged for auto insurance. Consider the following factors.
- Age and gender. Drivers younger than age 25 and older than age 70 typically pay the most for auto insurance because of their higher accident frequency. The same applies to gender, with women less likely to be in an accident. "Typically, inexperienced drivers pay more for premiums, and female drivers pay less than male drivers for auto insurance," says financial expert Lyle Solomon, principal attorney for Oak View Law Group in Rocklin, California.
- Location. Areas with more claims typically pay higher rates. "More populous states typically have average higher rates than less dense locations. Due to higher rates of vandalism, theft, and accidents, urban drivers also pay a higher auto insurance price than those in small towns or rural areas," says Mark Friedlander, director of corporate communications for the Insurance Information Institute.
- Coverage. The more auto insurance coverage you have, the more you pay for insurance. "The limits on your basic auto insurance required by your state, the amount of your deductible, and the types and amounts of policy options -- such as comprehensive and collision coverage -- that are prudent for you to have all affect how much you will pay for coverage," says Friedlander.
- Driving and claims record. If you have traffic violations, tickets and accidents on your driving record, your insurance rates will likely spike. "A bad driving record shows that you are more likely to file insurance claims, so insurance companies will consequently charge higher premiums," says Solomon.
- Type of vehicle. The value of your car, based on its make, model, age, mileage, and other factors, factor into your auto insurance premiums. Other variables include the cost of repairs, the likelihood of theft, engine size, and the overall safety record of your vehicle. "Sports cars usually have steeper insurance premiums than other types of vehicles. They go fast and have a higher risk of getting into accidents frequently," Solomon says.
- Credit history. Credit is correlated with the risk of filing a claim, so many insurance companies use it as a rating factor. A few states have outlawed this practice.
How to lower your car insurance premiums
There are many things you can do to shrink the size of your car insurance premiumThe payment required for an insurance policy to remain in force. Auto insurance premiums are quoted for either 6-month or annual policy periods..
- Shop around for auto insurance. Shopping around is the best way to get a lower rate on car insurance. When considering quotes from multiple insurance companies, "set the same coverage, deductibles, and limits so that you are comparing apples to apples," Solomon says.
- Ask about discounts, including bundling. Friedlander recommends purchasing your auto and home insurance from the same insurance company. Bundling discounts can save you 20% or more. "Additionally, ask about other common discounts you may be eligible for. These can include a discount for having anti-theft devices, completing a defensive driving course, driving low miles annually, being a long-time customer, having more than one vehicle on the policy, and having no accidents or moving violations in the past three years," he says.
- Choose a higher deductible. Increasing your deductible is another way to lower your premium. You can save hundreds by increasing your deductible from $500 to $2,000.
Frequently asked questions
Why is my insurance so high with no accidents or tickets?
Even though you may have a clean driving record, you may pay more for car insurance today than a few years ago. That's due to things like inflation, a higher frequency of accidents compared to the onset of the pandemic, supply chain disruptions, higher repair costs, and longer repair times because of parts shortages, among other factors.
What you pay will also depend on your age, gender, state, coverage options, type of car, credit score, driving habits, deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim., and marital status.
Why is insurance so expensive under 25?
Mature drivers usually have fewer accidents than less experienced drivers, particularly teenagers.
Insurance companies base premiums on risk. Riskier drivers pay more than ones that likely won’t file many car insurance claims. Since inexperienced drivers get into more accidents, insurers view them as riskier and charge higher car insurance premiums.
Is insurance higher for new cars?
Insurance premiums are usually higher for newer vehicles because of their higher market value. The cost of repairs is also greater for newer vehicles because of manufacturer-installed safety features that can be expensive to replace or repair.
Also, if you have full coverage insurance, your car insurance company could be on the hook if you total your car, which is why they will likely charge more for premiums, says Koblyski.
Why is my car insurance going up every year?
Your automobile insurance premiums may increase from year to year for several reasons. These include inflationary factors, your driving record, history of claims, and driving habits, your credit score, the state you reside in, and your advancing age.
The Insurance Information Institute reports that rising claimAn insurance claim is a request you make to your insurance company for coverage after your car is damaged or you have an accident. You can file a claim online, by phone, or in writing. costs have been the primary factor generating insurance premium increases over the past decade.
Which cars have the highest insurance rates?
Typically, newer, sportier, and more expensive vehicles cost more to insure.
Sports and luxury cars have the highest insurance rates, including models by BMW, Mercedes, Audi, Lexus, Maserati, Porsche, and Jaguar, says attorney and financial expert Lyle Solomon.
Helpful auto insurance tools and calculators
