Car Insurance Soars for Millions Across 5 States

Car insurance rates have skyrocketed across the country in the past few years, driven by more expensive repairs and increasingly risky behavior from drivers. Five states are leading the way, with premiums in Minnesota and Maryland increasing by more than 50 percent in 2024, according to a new report by digital insurance agent Insurify.

Why It Matters

The cost of living, which climbed during the post-pandemic years of former President Joe Biden's administration, proved to be a crucial issue for American voters heading to the polls on November 5.

While President Donald Trump has promised to bring down the price of everyday goods, the cost of owning a vehicle is still rising across the country due to higher insurance premiums and costly repairs, and experts expect coverage will get more expensive throughout 2025.

What To Know

According to ConsumerAffairs, an estimated 283,400,986 commercial and personal vehicles were registered to drivers in the U.S. in 2021; 91.7 percent of U.S. households owned at least one vehicle, while nearly 22 percent had three or more vehicles.

According to the December 2024 Consumer Price Index (CPI) from the U.S. Bureau of Labor Statistics (BLS), the cost of car insurance rose by 11.3 percent over the previous 12 months—the second highest increase after that of the price of eggs. In the same time frame, the CPI rose 2.9 percent.

Despite the large increase, car insurance still grew less between December 2023 and December 2024 than it had 12 months before, when premiums were 20.3 percent higher than in 2022.

But car insurance is still rising faster than wages, adding significant financial strain on American drivers. Insurify analyzed its database of over 97 million auto insurance quotes to find that full-coverage car insurance premiums rose by 15 percent in 2024—slightly more than the BLS estimated—and 42 percent since 2022.

The largest increase, according to the agent's report, was reported in Minnesota, which saw rates go up by 58 percent in 2024, reaching $2,524 a year. Maryland followed with a 53 percent increase last year, which brought premiums up to $4,060.

California reported the third-highest premium increase, up 48 percent in 2024 compared to a year earlier, for a median rate of $2,575. It was followed by Pennsylvania, with a rate increase of 38 percent which brought premiums to $2,114, and Virginia, with a rate of $2,276, up 33 percent from a year earlier.

What's Behind the Rise in Premiums?

According to Insurify, "rising premiums reflect a combination of factors, including severe weather risks, urban congestion, and escalating repair costs," the company wrote in the report. "The growing affordability gap highlights the need for drivers to stay informed as auto insurance becomes a larger financial burden in these high-cost regions," it added.

What People Are Saying

Divya Sangameshwar, an insurance expert at financial research company ValuePenguin.com, said in a statement accompanying the report The State of Auto Insurance in 2025: "If [then] President-elect Donald Trump goes forward with his plan to impose tariffs on imported goods, insurance rate hikes could speed up again.

"In fact, 60 percent of replacement car parts are imported from other countries like China. Higher costs for parts could mean higher repair prices and more expensive claims, which will result in a bigger rate hike in 2026 and beyond."

Newsweek has contacted the White House via email for comment.

Douglas Heller, director of insurance for the Consumer Federation of America, told S&P Global that he feared U.S. drivers will drop their car insurance because of rising costs.

"When the choices are between auto insurance and medication or food, [consumers] can't take the risk with medication or food. But they can take the risk with auto insurance," he said.

"That's the risk that we all take together when people choose to go insured or not—or are forced to go uninsured. So we have a real concern that there's going to be a spike there."

What's Next

A majority of experts expect a slowdown in rate increases this year, though that doesn't mean premiums will stop rising. Insurify's experts expect car insurance rate increases to finally slow to 5 percent in 2025, offering a glimpse of hope to U.S. drivers.

ValuePenguin.com expects the median cost of car insurance to rise by an average 7.5 percent, reaching $2,101 a year. According to the company's 2025 outlook, Nevada and Florida will become the most expensive states for car insurance this year.

Experts fear that the rise in premiums will lead to a surge in uninsured drivers on American roads.

Are you a U.S. driver who is struggling to pay for coverage and has decided to go without car insurance? Get in touch with us at g.carbonaro@newsweek.com.