Auto insurance prices continue to rise. Learn ways to steer the cost cycle without compromising your vehicle coverage.
According to Value Penguin’s State of Auto Insurance report, costs will grow by 7.5% in 2025, estimating the national average at $2,101 for full coverage. That’s a considerable slowdown from last year’s increase of 16.5% and 12% in 2023.
Nevada, Florida, and Michigan are the most expensive states, with rates exceeding $250 per month. Maine, New Hampshire, and Vermont were the cheapest states, with prices barely topping $100 monthly.
Even with the slowdown, insurance costs will remain higher than in the past.
Reasons auto insurance prices grow
Extreme weather, increased cost of vehicle repairs, along with increased frequency of all claims, has translated into higher premiums for all drivers.
From supply chain issues to get parts, to the expansion of technology now used in vehicles compared to just ten years ago, repairing your vehicle costs more and takes longer. In response to this, your insurance carrier has to adjust rates accordingly in order to be able to support the new claim frequency and cost that is involved. Their priority is to make sure they have the funds to support, help, and make you whole in the event of a loss. As a consumer/insured, that is reflected in your increased rates.
Tips for lowering your auto insurance premiums
Contact your agent about discounts. Qualifying might be easier than you imagine. Ask about these potential savings moves:
- Bundle your car and property insurance.
- Pay the entire policy upfront instead of monthly.
- Enroll in autopay.
- Go paperless.
- Try telematics. (Before you commit, ensure there are no penalties for driving errors or unenrolling from the program if you don’t like it.)
- Get good student driver discounts.
- Improve your credit score.
- Raise your deductible. (You’ll pay a lower monthly premium but more out of pocket if you’re in an accident. Choose an out-of-pocket amount that works for your budget.)
Your independent agent can walk you through these options. Ask them to run multiple quotes with different discounts, deductibles and options. They can shop for better rates if they think you can get them. If you’ve had difficulty securing auto insurance, you might be better off staying with your current insurance carrier. Your agent can advise you on the best move for your situation.
Get an insurance quote before you buy your next car
If you’re in the market for another car, call your insurance agent before you sign the deal. Different makes and models come with different insurance price tags. Luxury or sporty models often cost more to insure because they cost more to repair or replace. Some electric cars also cost more to insure. Specific model years may cost more, too. It doesn’t mean you have to go with a car you don’t like, but you might change your mind about the kind of car you want once you know what the insurance will cost.
Why do your costs go up even though you’re a good driver?
Insurance rates go up for several reasons, and they don’t always have to do with your driving record. Usually, they go up during a hard market when insurance companies raise their standards and rates to compensate for the losses they incurred in previous years. It may seem unfair, but insurance carriers can go bankrupt if they don’t raise rates to reflect the current conditions.
Here are some reasons auto rates increase:
An increase in accident rates
High congestion in urban areas and increased distracted and impaired driving contribute to more accidents.
Higher medical costs from accidents involving injuries
The medical expenses associated with these claims have also been growing.
An increase in car prices and technology
Modern cars have features like backup cameras and collision warning systems, making them more expensive to repair or replace.
A rise in uninsured or underinsured drivers
When more drivers are uninsured, insurance companies pay more for accidents, especially when the payment would have come from the other uninsured driver’s insurance carrier.
Fraud
Scammers often stage accidents or exaggerate claims, increasing the overall cost. Policyholders absorb these costs.he policy limit, but it could be higher.
Call for an auto coverage review
Our team can help you understand your current coverages, deductibles and more. We’re happy to help you stay updated about ways to save. Reach out to our Personal Insurance team for a free, no-obligation review.
This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.
Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.
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