Car insurance costs are soaring across the US, catching many industry watchers off guard.
A new report from Insurify, a company that compares insurance rates, reveals just how steep these increases have been.
Americans are paying 15% more for full-coverage car insurance in the first half of 2024 compared to last year.
By year’s end, that increase could reach 22%. To put it in perspective, drivers are now paying almost 50% more than they did in 2021.
Some states are hit harder than others.
TRENDING: Kamala Harris Cast Tie Breaking Vote to Have IRS Crack Down Harder on Service Workers and Tips
California, Missouri, and Minnesota could see premiums jump by over 50% this year.
Natural disasters like severe storms and wildfires are partly to blame.
Property taxes, increased debt service costs for credit card and auto, student loans, sky-rocketing insurance rates and higher costs of home ownership have leveled consumers
Biggest increase since COVID
And that’s before significant weakness in official unemployment #s https://t.co/OCtvJuMQxV
— Melody Wright (@m3_melody) August 7, 2024
Maryland tops the list with the highest rates.
Drivers there pay an average of $3,400 a year for full coverage.
New laws are a big reason why.
One recent change requires insurers to offer enhanced uninsured motorist coverage.
This lets drivers combine their coverage with the at-fault driver’s insurance, which pushes up costs for insurance companies.
But it’s not just new laws driving up prices.
Supply chain problems from the pandemic are still causing issues.
There’s also a big shortage of mechanics nationwide, which makes car repairs more expensive.
The mechanic shortage is a growing problem.
At the end of 2023, there were more than two and a half job openings for every graduate of a car repair training program.
The TechForce Foundation, which tracks these trends, says the number of graduates has fallen by 20% since the pandemic started.
Whitmer’s Michigan: Auto insurance rates 81% above national average – highest in the U.S. https://t.co/qHNuhUM8RR via @Th_Midwesterner
— The Midwesterner (@Th_Midwesterner) August 12, 2024
“There’s been a huge gap between the supply and demand for mechanics for decades,” the Foundation reported last year.
This shortage is expected to get worse, which could keep pushing insurance rates higher.
Looking ahead, there’s little relief in sight.
READ NEXT: Large Home Improvement Chain Files for Bankruptcy in US – Closing 94 Stores
With ongoing mechanic shortages, new insurance laws, and the threat of natural disasters, car insurance rates may continue to climb for some time.
