Even if you've got a perfect driver's record, there's a chance your auto insurance will go up at renewal. Want to know if your insurer is amongst the top 5 when it comes to price hikes? In this article, you'll find:
Auto Insurers With the Biggest Price Increases
The auto insurance industry hasn’t been doing well over the last few years. A lot of it goes back to the pandemic and global supply chain shortages. Put simply, Clark says:
"When vehicle costs went way, way, way up and the value of used vehicles went way up…it meant that when you were in an accident, if [your insurer] totaled out your car, the amount they were having to pay was much higher than their analysis said it would be.
"Multiply it by the number of people who had vehicles totaled and repair costs were higher. So, that is one of that factors that led insurers to be upside down in auto insurance."
Unfortunately, raising rates on policyholders is one way that insurance companies are combatting this issue. Which companies are the worst when it comes to rate increases? We've got numbers for you based on data from S&P Global. These are the top five auto insurers with the biggest price increases:
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Overall, the average rate change for auto insurers in 2023 was 14.91%! But as we know, averages don't always show the full picture. Drivers in some states may have experienced much more severe price hikes from some of these companies.
Consider drivers insured by Farmers Insurance: The company raised its auto insurance rates by double-digits in 43 states last year! And although the overall average increase from Farmers was 17.6%, Nebraska drivers saw an average increase of 30.4%! Want to know which states are going to be hit the hardest by price hikes this year? Keep reading.
States With the Biggest Auto Insurance Price Increases
I've written about the impact of where you live on the cost of your auto insurance, and you can check out what states have the most and least expensive car insurance here. But you don't have to live in one of the most expensive states for car insurance to feel a big change in what you pay this year.
According to data from ValuePenguin's 2024 State of Auto Insurance report, these five states can expect the biggest increases in pricing for auto insurance this year:
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Car insurance is regulated at the state level, which sometimes can disadvantage consumers. Clark says:
"A lot of state insurance departments are known as captive regulators. They are dependent on the auto insurers and homeowners insurers to the point that — instead of being impartial or being on guard to help consumers — they become really the agents and allies of the insurance industry."
Let’s look at some states that didn’t make the list, but are worth watching:
California
In California, it's becoming more difficult to get insurance in general as insurers decide the state is too risky to serve. Last year, for example, Allstate stopped selling new auto policies in CA. The company has made a comeback this year, but there's a major catch. State regulators from the California Department of Insurance are allowing Allstate to raise their rates by 30% across the state!
While they say the increase will vary from driver to driver, the given range of price increases in California is anywhere from 10-15% on the low end, and up to as much as 55% on the high end!
Illinois
"The 10 largest car insurance companies raised Illinois drivers' rates by more than $1.25 billion in 2023," according to the data from the Illinois Public Interest Research Group (PIRG). The research group's data shows that State Farm and Allstate were the worst offenders. And it's estimated that the companies are planning double-digit price hikes (by percentage) for policyholders this year.
According to the Illinois Secretary of State, Alexi Giannoulias, "We are one of only two states that does not do a review for these rate hikes." But two bills (HB4767 and SB3213) have been introduced in hopes of making insurance better for drivers.
New York
The average overall price increase for auto insurance is 15.7% in New York. But — if you live in New York and missed the news — New York made a change to auto insurance for residents last year that increased rates for drivers.
New Yorkers should review policy coverages and look out for something called supplemental spousal liability (SSL) insurance. Even if you don't have a spouse, auto enrollment for drivers started last August. Buffalo News reports that up to half of drivers will get no benefit from this coverage. But unless you opt out in writing, the coverage will be included with your policy. You can review the law and coverage declination form here.
Clark Howard’s Strategy To Save on Auto Insurance Right Now
Want to know what to do if your car insurance goes up? Clark has you covered. He says:
“When you get a notice from your insurer of a big rate increase, you’re not going to be a sitting duck if you follow my guidance here.”
The best way to save money on car insurance right now is to re-shop for a lower rate!
“When that renewal notice comes that says ‘you’re gonna owe a zillion more for your auto insurance.’ Do you just pay it?” Clark asks. “No, you don’t. You shop the market. Shop the market because each insurer classifies individual drivers or a household differently.”
Be sure to check out our guide on how to shop for lower car insurance when you're ready to take the next step. And in addition to shopping around, here are four other things you can look into that might save you money right away on car insurance.
1. Increase Your Deductible
If — in the event of an unexpected accident — you can afford a higher deductible, take it. Insurance companies look at higher deductibles like this: The higher a person’s deductible, the less likely they are to file a claim — especially unnecessarily.
When you increase your deductible, you take on more risk. In return for doing this, your premiums will go down. Many insurance companies have online tools that’ll let you see just how much you can save with a higher deductible, but you can also call your insurer to get quotes before making a change.
2. Drop Extra Coverages
If you haven’t reviewed your insurance policy in a while, now’s a great time. You might be surprised to find you’re paying for coverages that you don’t need or that just aren’t financially beneficial.
For example, maybe you pay for rental reimbursement, but you already own another car you'd drive if your main ride was in repair. Or maybe the value of your car has decreased to the point that you no longer need comprehensive and collision coverage.
3. Ask for Discounts
You might be surprised to learn that your insurer offers discounts you qualify for but aren’t currently receiving. This recently happened to me when I signed up for a new policy this year. I called the company and learned I could save an additional $20 monthly for a discount their website didn’t capture in my initial quote.
We've got a list of common discounts that auto insurers offer here. But there are a few lesser talked about discounts you might learn about directly from your insurer. For example, did you know that you can save between 6-14% off your policy on average if can afford to pay for your premium upfront?
4. Consider Pay-Per-Mile or Usage-Based Insurance
This tip is for drivers who log less than 10,000 miles a year. I recently switched to pay-per-mile auto insurance and have been enjoying great savings! But pay-per-mile insurance hasn't made its way across the country yet. If you can't find pay-per-mile near you, your insurer might offer usage-based insurance (UBI).
There are a few differences between UBI and pay-per-mile, so it's understandable if you're a bit skeptical of how your driving data might be used with UBI. But if you're confident that you're a safe, law-abiding citizen on the roads, UBI could be a great way to save and is generally more available across the country than pay-per-mile.
For even more money-saving tips, check out our list of 10 ways to save money on car insurance.
Final Thoughts
Auto insurance rates are on the rise. And even drivers with the most spotless records can’t escape the price hikes. But you don’t have to accept whatever rate you’re given upon renewal.
Unfortunately, being loyal to your insurer doesn’t serve you or your wallet. To make sure you’re getting the best rate for coverage in the current market, shop around!
The post Top 5 Auto Insurers With the Biggest Price Increases appeared first on Clark Howard.