You're Not Going Crazy. Auto Insurance Rates Are Skyrocketing

After a brief dip in 2020 when fewer people were driving, rates have risen faster than at any point in the last 50 years.

By: Christopher Smith

Dec 16, 2024 at 1:00pm ET

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Everything is crazy expensive right now, and auto insurance companies aren't helping. Data from the U.S Bureau of Labor Statistics show average premiums are way up. In just the last three years, the consumer price index for motor vehicle insurance leaped from 568.24 to 866.13. By comparison, the index was flat the three years prior.

That represents an increase of approximately 51 percent since November 2021, according to the Washington Post. In fact, the last three years have seen the sharpest increase in a half-century's worth of data. Translated into dollars, Bankrate reports the average cost for full-coverage auto insurance is currently $2,543 per year. Yikes.

Photo by: US Bureau of Labor Statistics

It's no secret that prices for new and used cars are at record highs, but the Washington Post also points out higher repair costs are driving up insurance prices, too. All the tech that makes vehicles safer also makes them more expensive to fix, something AAA pointed out back in 2023. But does all that really account for a 51-percent increase in insurance rates?

What do you think?

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Motor1 contacted several US-based auto insurance companies for comment. We've yet to receive any replies.

If there's any good news here, the increase could be easing up. The latest data shows prices leveling off between October and November. However, there was a similar plateau in May 2024 before things started rising again. In short, uncertainty still abounds in the automotive market, especially with the possibility of big tariffs on imported goods coming next year. That could lead to higher new-car pricing, which would likely translate directly to insurance premiums.