Home Business Why auto insurance rates are rising in the US

Why auto insurance rates are rising in the US

by SuperiorInvest

Car insurance is increasingly expensive. The average annual premium for full coverage auto insurance in the U.S. rose to $2,543 in 2024, up 26% from the previous year, according to Bankrate.

Factors such as longer repair times and higher car rental costs are driving up prices, according to a report from the American Property Casualty Insurance Association.

Additionally, cars are becoming more expensive to repair.

“Over the last 12 months we are in an environment where essentially all insurers have aggressively increased premiums,” said Stephen Crewdson, senior director of insurance business intelligence at JD Power. “That has led to an environment where the consumer, the insured, is looking for auto insurance and finding that they can't find an insurer that has a lower premium for them.”

About 215 million Americans have auto insurance and the market is valued at about $353 billion, according to IBISWorld.

So what other factors are behind the rise in auto insurance rates and what impact is rising premiums having on consumers and large publicly traded companies like Allstate, Progressive and Berkshire Hathaway's Geico?

Watch the video to learn more.

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