This news can't be all that surprising given the nature of today's economy - but it doesn't make sharing it any more pleasant. Auto insurance rates are on their way up this year, according to ValuePenguin's State of Auto Insurance in 2023 Report.
2023 Auto Insurance Rate Predictions
Researchers predict that as insurers feel the pressure from inflation, we can expect car insurance premiums to increase an average of 8.4% in 2023. That's a steep increase compared to last year's slight 0.6% increase. One thing is for sure. It certainly leaves all the insurance premium decreases during the early years of the pandemic in the rearview mirror.
So what does that 8.4% mean for consumers? ValuePenguin predicts that auto insurance rates will climb to an estimated $1,780 annually. Researchers say forty-five states will see their insurance premiums climb. Drivers in Michigan, Florida and Rhode Island can expect the highest premiums.
"This year's auto insurance rate increase is the highest rate increase since 2017," said Divya Sangameshwar, insurance expert at ValuePenguin.com. "After two years of keeping rates low for drivers, car insurance companies are raising rates in 2023 due to an increase in car repair costs and claims".
What's also interesting is that insurance for electric vehicles is expected to be nearly 30% higher than gas-powered cars.
Here's a rundown of the predictions shared by ValuePenguin:
- Auto insurance is expected to increase by 8.4% in 2023 with 45 states seeing their rates increase by at least 1%.
- The average cost of full coverage car insurance in 2023 is $1,780/year, with Michigan, Florida, and Rhode Island residents paying the highest premiums.
- Drivers with traffic violations in 2023 will see their premiums jump 52% on average.
- Car insurance for new electric vehicles (EVs) will be 28% higher than new gasoline-powered cars. The Porsche Taycan ($3.576) and Tesla Model Y ($3,110) will have the highest insurance premiums in 2023. The Honda CR-V will be the least expensive car to insure in 2023.
Among the 45 states expected to see premiums increase:
- Illinois has the largest jump at 17%
- followed by Arizona (15.6%)
- and New Hampshire (13.6%)
As in years past:
- Michigan will continue to see the most expensive premiums at $4,788
- followed by Florida ($2,856)
- and Rhode Island ($2,7480)
ValuePenguin says traffic violations in North Carolina, California will cost you the most on your premiums. Violations in these states will increase your premiums by more than 100%.
To read the full report click here.
Tips To Save On Your Auto Insurance in 2023
So how can you save in insurance in 2023, with premiums going up? Here's some advice from ValuePenguin.
- Compare insurance quotes: ValuePenguin says 92% of policyholders who switched auto insurance companies in 2022 reported saving money. 26% reported savings of $200 or more a year. Since premiums can vary by hundreds of dollars depending on the company researchers says comparing quotes is one of the best ways to save money on auto insurance in 2023.
- Research car insurance discounts: Work remotely? Then take advantage of discounts for driving less or opt for pay-per-mile car insurance, which can reduce rates even further for low-mileage drivers. ValuePenguin also reminds you not to forget about Safe Driver Discounts, too. Often too there are discounts if you bundle home, auto and other policies together.
- Adjust your coverage: ValuePenguin says liability-only car insurance is 157% cheaper than full coverage car insurance, and says it's a good way to save if you don't have a vehicle loan or expensive car. Additionally, its experts suggest ditching optional coverage like roadside assistance to bring the cost down. As CarPro Radio Show host Jerry Reynolds explains here, many automakers offer their own roadside assistance.
- Improve credit score: Improving your credit score helps you out in many ways, including lowering your car insurance. ValuePenguin says that Americans with a poor credit score pay as much as 80% more for car insurance. Read more about credit scores and car insurance premiums on ValuePenguin.