According to a new Insurify study, drivers in the United States have been paying about 17% more for car insurance since 2020. The average cost of vehicle insurance is now $1,750 per year.
Michigan drivers pay the most for car insurance, an average of $2,510 per year. This is approximately 55% more than the $762/year average paid by vehicle owners in
Hawaii, the least expensive state for coverage.
Inflation, traffic accident rates, medical costs, and vehicle repair costs all contributed to rising premiums.
“While we saw the economy accelerate and demand rebound following the pandemic, Americans’ overall cost of living, including insurance, increased in 2022 due to built-up pandemic-related disruptions and increased inflation,” Insurify CEO Snejina Zacharia told Yahoo Finance.
The Infiniti Q5 is the most expensive to insure, costing $3149. At $3,040 per year, Tesla’s (TSLA) Model 3 is the second most expensive vehicle to insure.
According to the Bureau of Labor Statistics’ latest Consumer Price Index reading, drivers have seen a steady increase in motor vehicle insurance prices, with prices in September 10.3% higher than the same month last year.
According to the study, the most expensive cities for vehicle insurance include:
- $4,593 in Detroit
- $3,657 in New York, NY
- $3,236 in Warren, Michigan
This compares to the cheapest car insurance rates in the following metropolitan areas.
- $768 per year in Honolulu
- $820 in Winston-Salem, North Carolina
- $929 in Raleigh, North Carolina:
According to the study, location has a significant impact on car insurance prices. Regional factors such as mild weather, lax local regulations, and little traffic congestion frequently result in lower rates.
Rising insurance costs are influencing policyholders’ driving decisions. According to an Insurify survey conducted earlier this year, approximately 65% of drivers are considering driving less.
To save money, 30% of drivers polled are considering purchasing a hybrid or electric vehicle. Despite the legal risks of driving without insurance, an astonishing 10% of vehicle owners are considering dropping their insurance coverage entirely.