US auto insurers are racing to increase premium rates as they seek to offset historically poor underwriting results. The year-to-date nationwide average increase for private auto insurance is 15% in October 2024. There is a wide variance in the effective rate change between individual states, according to S&P Global Market Intelligence.
U.S. auto insurers continue to report underwriting losses despite sharper improvement in premium rates, with the 2024 marked by continued unfavorable claims severity and higher catastrophe related losses. Future profit improvement will continue to be hindered by unusually high loss severity (see TOP 10 Largest U.S. Auto Insurance Companies).
The national average rate for full coverage car insurance is $1,895, but how much you’ll pay depends largely on where you live. The state you reside in is one of the biggest factors influencing the price of your auto insurance premium
US private auto insurance premiums rose in the H1 2024 to $123 bn. Overall direct loss ratio for the business line also deteriorated, rising to 70%.
The rise in premiums can be attributed in part to carriers continuing to produce strong top-line growth as they attempt to catch up to fast-rising private auto loss costs via rate increases.
The average cost of auto insurance in the U.S.
Car insurance is like a fingerprint. Although your circumstances may seem similar, your personalized rating factors will cause your premium to vary from that of friends, family and the national average.
Louisiana is the most expensive state for car insurance with average auto insurance premium of $2,883 annually. Maine’s average insurance premium for full coverage is $1,175 annually, making this the cheapest state for car insurance in 2024
Although men tend to pay more for car insurance than women, this is not the case for 50-year-old drivers. 50-year-old women pay, on average, $2 more a year for full coverage car insurance than 50-year-old men.
Some vehicles experience higher average insurance premiums than others because of MSRPs, safety features, repair costs, parts availability and other variable characteristics. For example, the average cost of full coverage insurance for a Tesla Model 3 is 60% higher than for a Subaru Outback.
Nevada has had the highest overall calculated effective rate increase so far in 2024 at 27.9%, compared to a low of 2.5% in Idaho.
In total, 32 states reflect a double-digit increase based on about 11 months of approved rate filings.
Auto insurance rate changes and loss ratios by State
US auto insurance rate increases
The countrywide average will have increased by double digits in back-to-back years if this trend continues for the remainder of 2024. For several years prior to the current spike in private auto premiums, the average yearly change was a low single-digit increase.
The exception was in 2020, when COVID-19 spurred a rash of premiums credits to compensate consumers for their decreased driving habits.
Texas has the highest cumulative rate increase of 37.6% over the past 20 months when factoring in the surge in private auto rates since the start of 2022.
Seven other states have a cumulative effective rate increase of 30% or more: Illinois, Ohio, Tennessee, Nevada, Arizona, Illinois and Utah.
TOP 10 States by highest effective Auto insurance rate
| № | State | US Insurance Rate change |
| 1 | Nevada | 27,9% |
| 2 | Louisiana | 15,0% |
| 3 | Illinois | 14,4% |
| 4 | New York | 14,2% |
| 5 | Georgia | 13,6% |
| 6 | Wisconsin | 13,0% |
| 7 | Nebraska | 12,9% |
| 8 | Utah | 12,8% |
| 9 | Tennessee | 12,7% |
| 10 | Washington | 12,5% |
The states with the lowest cumulative increase are Hawaii (4.4%), Vermont (6.3%), North Carolina (8.2%) and California (11.1%). The relatively minimal cumulative rate increase in The Golden State is due to the almost two-year hiatus by the state regulator to approve any private auto rate increase.
Louisiana leads as the most expensive state for auto insurance, followed by Florida, California, Colorado, and South Dakota.
Rates have risen due to inflation affecting parts and repair costs. Other factors include higher population, crime rates, and weather trends. Additionally, more uninsured drivers and costly lawsuits contribute to higher premiums.
In Louisiana, rates increased significantly this year, with a $189 difference compared to Florida, the second-most expensive state for full coverage.
Inflation and national premium hikes have primarily driven Louisiana’s rates to the top.
Top 10 most expensive states for car insurance
| Louisiana: $2,883 |
| Florida: $2,694 |
| California: $2,416 |
| Colorado: $2,337 |
| South Dakota: $2,280 |
| Michigan: $2,266 |
| Kentucky: $2,228 |
| Montana: $2,193 |
| Washington, D.C.: $2,157 |
| Oklahoma: $2,138 |
Top 10 least expensive states for car insurance
| Maine: $1,175 |
| New Hampshire: $1,265 |
| Vermont: $1,319 |
| Ohio: $1,417 |
| Idaho: $1,428 |
| Virginia: $1,469 |
| Indiana: $1,515 |
| Hawaii: $1,517 |
| Illinois: $1,532 |
| Washington: $1,608 |
The rate information is sourced from disposed private passenger auto rate filings collected by S&P that are submitted to the Department of Insurance in various states.
The analysis is limited to rate filings of each state’s 10 largest private auto underwriter based on 2023 direct premiums written plus any of the country’s 10 largest private auto underwriters outside the state’s top 10.
The effective rate change is the average of the cumulative changes by renewal business effective date for each insurer weighted against respective calendar year direct premiums written reported within the NAIC property and casualty regulatory statements.
Top 10 U.S. private auto insurers’ effective rate change
| Insurer | Changes, % | 2024 Rate change | 2023 Rate change |
| 1. Farmers Insurance | 30,7 | 14,2 | 14,5 |
| 2. Allstate | 27,3 | 11,1 | 14,5 |
| 3. GEICO | 25,9 | 7,6 | 17,1 |
| 4. USAA | 24,4 | 14,9 | 8,2 |
| 5. State Farm | 24,4 | 13,9 | 9,2 |
| 6. Liberty Mutual | 22,7 | 8,8 | 12,8 |
| 7. Travelers | 21,8 | 11,9 | 8,8 |
| 8. American Family Insurance | 19,9 | 11,5 | 7,5 |
| 9. Progressive | 19,4 | 8,5 | 10 |
| 10. Nationwide | 18,9 | 8,8 | 9,3 |
TOP 10 U.S. Car Insurance Companies
| № | Insurer | Premiums written in billions |
|---|---|---|
| 1 | State Farm | $40.4 |
| 2 | Geico | $33.9 |
| 3 | Progressive | $33.2 |
| 4 | Allstate | $25.9 |
| 5 | USAA | $15.8 |
| 6 | Farmers | $12.2 |
| 7 | Liberty Mutual | $11.8 |
| 8 | Nationwide | $5.8 |
| 9 | American Family | $5.2 |
| 10 | Travelers | $4.9 |
Geico has boosted its rates by a calculated effective rate of 53.8% in Nevada, the highest percentage increase among the largest US private auto insurers. The large effective rate calculation for the insurer is due to multiple approved rate filings with a renewal business effective date occurring in 2024.
The state’s largest auto insurer first boosted its rates in February by an overall average of 26.3%. GEICO subsequently requested and received approval to again raise its rates by more than 20% in July. The additional rate increase is expected to take effect Sept. 18.
Average car insurance rates by state
| State | Average annual rate full coverage | Average annual rate liability |
| Alaska | $1,676 | $508 |
| Alabama | $1,860 | $639 |
| Arkansas | $1,957 | $589 |
| Arizona | $1,812 | $764 |
| California | $2,416 | $864 |
| Colorado | $2,337 | $717 |
| Connecticut | $1,725 | $783 |
| Washington, D.C. | $2,157 | $785 |
| Delaware | $2,063 | $1,022 |
| Florida | $2,694 | $1,629 |
| Georgia | $1,970 | $789 |
| Hawaii | $1,517 | $572 |
| Iowa | $1,630 | $320 |
| Idaho | $1,428 | $440 |
| Illinois | $1,532 | $471 |
| Indiana | $1,515 | $498 |
| Kansas | $1,900 | $471 |
| Kentucky | $2,228 | $810 |
| Louisiana | $2,883 | $1,266 |
| Massachusetts | $1,726 | $655 |
| Maryland | $1,746 | $756 |
| Maine | $1,175 | $341 |
| Michigan | $2,266 | $645 |
| Minnesota | $1,911 | $512 |
| Missouri | $1,982 | $582 |
| Mississippi | $2,008 | $637 |
| Montana | $2,193 | $540 |
| North Carolina | $1,741 | $523 |
| North Dakota | $1,665 | $370 |
| Nebraska | $1,902 | $373 |
| New Hampshire | $1,265 | $416 |
| New Jersey | $1,902 | $915 |
| New Mexico | $2,049 | $658 |
| Nevada | $2,060 | $1,042 |
| New York | $1,870 | $827 |
| Ohio | $1,417 | $446 |
| Oklahoma | $2,138 | $657 |
| Oregon | $1,678 | $710 |
| Pennsylvania | $1,872 | $504 |
| Rhode Island | $2,061 | $808 |
| South Carolina | $2,009 | $925 |
| South Dakota | $2,280 | $338 |
| Tennessee | $1,677 | $547 |
| Texas | $2,043 | $774 |
| Utah | $1,825 | $756 |
| Virginia | $1,469 | $477 |
| Vermont | $1,319 | $324 |
| Washington | $1,608 | $731 |
| Wisconsin | $1,664 | $425 |
| West Virginia | $2,005 | $585 |
| Wyoming | $1,758 | $331 |
State Farm Mutual Automobile Insurance Co.’s multiple rate filings in The Silver State will boost its rate by 34.7%. A 9.4% overall rate increase went into effect in March, followed by a 23.1% increase in July.
State Farm has boosted its rates by double digits in 32 states out of the 46 states with approved increases. The Illinois-based insurer’s countrywide calculated rate increase is 13.9% so far in 2024.
Car insurance policies that major insurance companies underwrite tend to be less expensive. Because large insurers write millions of policies each year, they can afford to price their policies more competitively.
Additionally, the biggest insurance companies in the U.S. often have more coverage options. If you want to customize your policy with endorsements or need specialty coverage like rideshare insurance, a large provider is more likely to have those policies.
FAQ
Auto insurers are raising premium rates to offset poor underwriting results and increased loss severity, partly due to higher catastrophe-related losses and inflation affecting parts and repair costs.
The nationwide average increase for private auto insurance is 15% year-to-date in October 2024, with significant variation across states. For example, Nevada has seen the highest rate increase of 27.9%.
Car insurance premiums vary due to factors like local population, crime rates, weather trends, state regulations, and the number of uninsured drivers. States with more claims or higher risks see higher premiums
Louisiana has the highest average annual premium at $2,883, while Maine has the lowest at $1,175. States like Florida and California also have high rates, while states like Vermont and Ohio are among the least expensive.
Insurance rates vary based on personalized rating factors such as location, vehicle type, driving history, and age. Even if circumstances seem similar, these factors can lead to different premiums.
If the current trend continues, the countrywide average increase will have risen by double digits in back-to-back years. States like Texas have already seen a cumulative rate increase of over 30% since 2022.
Vehicles with higher MSRPs, expensive repair costs, or fewer safety features tend to have higher insurance premiums. For example, insuring a Tesla Model 3 can cost 60% more than insuring a Subaru Outback.
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AUTHOR: Jason Woleben – Research Analyst at S&P Global Market Intelligence
Fact checked by Oleg Parashchak – CEO Finance Media & Editor-in-Chief at Beinsure Media
