Drivers have had a rough ride with rising car insurance prices in 2023
But prices are not about to fall, experts say, with more hikes due next year
By Sam Barker
Updated:
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Drivers face paying record high prices for car insurance premiums - and unfortunately 2024 does not look likely to bring any respite, with rises of up to 10 per cent predicted.
Car insurance premiums rose 29 per cent in the year to November, reaching a record average high of £561.
Insurers say the rising cost of replacement parts and labour costs were behind the steep hike in annual insurance prices.
And as new cars become more technologically advanced, they also become more expensive to repair.
Driven up: Car insurance premiums are rising, and drivers may face even higher costs in 2024
Insurers also report that a shortage of skilled repairers is hiking up the cost of claims as repairs take longer to carry out.
This also means drivers need courtesy cars for longer periods, another large cost to insurers that is passed on in the form of premiums.
Insurance premium taxadds 12 per cent to what motorists pay for insurance, piling on the pain as premiums continue to rise.
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But critics of insurers also say that the financial firms can have a flock mentality and have long been waiting for an excuse to raise motor premiums, which have been low for many years.
David Borland, EY UK and Ireland automotive leader, said: 'Insurance premiums rising amid ongoing cost of living pressures could present a challenging headwind to the auto sector's bid to ramp up consumer demand.'
A spokesperson for the Association of British Insurers would not comment on the level of motor insurance premiums in 2024.
Going up: Figures show the cost of car insurance has risen in recent years
When will car insurance premiums fall again?
Motor insurance costs will begin to drop when falling inflation filters through insurers' supply chains.
Inflation in November 2023 was 3.9 per cent, according to the Office for National Statistics, down from 4.6 per cent the month before.
EY UK insurance leader Martina Neary said: 'While many consumers expected premiums to rise, the level and pace of the increase is much higher and sharper than many expected.
'The current economic environment is of course difficult for both consumers and for firms but as inflation starts to fall back, conditions for consumers and insurers alike should improve.'
Car insurance bills have a habit of creeping up, so comparing prices for the best deal is a wise move.
New rules introduced to stop insurers bumping up renewal quotes haven't had the desired effect and it still makes sense to check for better deals on thecomparison sites.
This is Money suggests you try at least two of these:
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2024 Auto Insurance Increases Will Hit You Hard! Full coverage costs $212 a month on average, while liability-only coverage costs $103 a month. That prices out to $2541 and $1238 a year, respectively. In 2023, the average price of full-coverage car insurance across the country went up by 24%.
Your particular driver profile, which includes factors like where you live, your age and your driving record, influences what you pay for car insurance. But rising car repair costs and an increase in disaster-related claims are significant reasons why car insurance rates are surging for many drivers.
Auto insurance rates rose 2.6% in March and are up 22% from a year ago. Premium costs have been marching steadily higher since 2022, even as inflation at the consumer level steadily cooled from its 9.1% peak in the middle of that year.
Annual increases are typical across the industry, but the way your risk factors are viewed by a particular company may vary. Get to understand your coverage and discounts to ensure you are getting the best price for the assurance you need.
The Centers for Medicare & Medicaid Services (CMS) has announced that the standard monthly Part B premium will be $174.70 in 2024, an increase of $9.80 from $164.90 in 2023. The annual deductible for all Medicare Part B enrollees in 2024 will be $240, an increase of $14 from the 2023 deductible of $226.
Using this formula, the premium adjustment percentage for the 2024 benefit year is 1.4899877401 ($7,292/$4,894), which represents an increase in ESI premiums of approximately 48.9 percent over the period from 2013 to 2023.
You are particularly affected by where you live and the people directly around you. If you live in an area where there is a lot of car theft or a higher number of accidents, your insurance company may assume there is a higher risk that you will also have similar claims.
On average, drivers with poor credit pay 118 percent more for full coverage car insurance than those with excellent credit. California, Hawaii, Massachusetts and Michigan prohibit or limit the use of credit as a rating factor in determining auto insurance rates.
In 2022, the U.S. inflation rate hit a 40-year high,* driving up business costs in every industry, including car insurance. From the cost of car parts and repair labor to medical bills and liability claims, inflation has made everything tied to auto insurance pricier.
“Inefficient regulatory environments in states like California, New Jersey and New York, combined with inflation and increased catastrophic losses, have left consumers with fewer choices of insurers and higher costs,” he said.
Your Progressive rates may increase after six months depending on a number of factors. Like other car insurance providers, Progressive will typically raise your rates if you receive a speeding ticket or moving violation, cause an accident or make comprehensive insurance claims.
"Between 2020 and 2024, inflation increased the cost of vehicle parts and labor, car crash fatalities increased by over 10% and we saw a significant rise in extreme weather and vehicle theft claims. All these factors contribute to the high rates we're seeing today."
Safe drivers are generally less apt to get into accidents, so they typically pay less for auto insurance. Conversely, you might pay more for car insurance if you have a history of moving violations for dangerous habits such as speeding or reckless driving.
Geico may have raised your rates because of changes to your policy or circ*mstances. Examples include adding a new type of coverage, becoming eligible for an additional type of discount, being involved in an accident, or buying a new car.
Premiums are rising by an average of 5% in 2024 for the second-lowest cost silver plan (the benchmark against which subsidies are calculated). Premiums for the lowest cost bronze plans (the least expensive plans on the Marketplaces) are similarly rising 6%.
North Carolina Insurance Industry Proposes Average 42% Homeowner Premium Increase. Jan. 8, 2024, at 4:26 p.m. RALEIGH, N.C. (AP) — Another round of setting homeowner insurance policy rates in North Carolina has begun with the industry seeking a 42.2% average statewide premium increase that would begin in the summer.
Monthly premiums on plans purchased through Covered California were stable throughout the pandemic, increasing an average of just over 1% per year from 2020 through 2022 as many people delayed routine health care. But this year, rates jumped 5.6% in California as people started returning to doctor's offices.
Introduction: My name is Greg O'Connell, I am a delightful, colorful, talented, kind, lively, modern, tender person who loves writing and wants to share my knowledge and understanding with you.
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