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Auto insurance prices have been a key driver of inflation this year, and the trend seems set to continue. A report forecasts that insurance rates could increase by around 50% in at least three U.S. states in 2024.
Insurify, a company specializing in tracking insurance rates, estimates that the average cost of an auto policy in the U.S. will rise by 22% this year, reaching approximately $2,469 by the end of the year. This increase adds to the average 24% rise seen in 2023, meaning vehicle owners will be paying over 50% more for their insurance compared to two years ago.
Some drivers may face even higher increases in 2024. According to the Insurify report, rates in California, Minnesota, and Missouri are expected to rise by 54%, 61%, and 55%, respectively.
Although overall inflation slowed to 2.9% in July, the first time it has fallen below 3% since March 2021, drivers are still seeing increases in their insurance premiums.
Insurify attributes these increases to increasingly severe and frequent weather events, which are driving up the cost of premiums. In 2023, hail-related claims accounted for 11.8% of all comprehensive claims, up from 9% in 2020, according to CCC Intelligent Solutions.
Despite significant increases in California, Minnesota, and Missouri, these are not the states with the highest premiums. According to Insurify, Maryland currently has the highest average rate at $3,400 for annual full coverage, with a projected 41% increase to $3,748 by the end of the year. South Carolina, with an average premium of $3,336 in June, could see a 38% rise to $3,687 by year’s end.
The rise in costs for insurers also contributes to these increases. Expenses for labor and parts needed for repairs have risen by over 40%, and the involvement of lawyers in claims has driven up operational costs. In summary, maintaining and insuring a vehicle will become increasingly expensive this year.
Sources: https://laopinion.com/
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