NBC 5’s Alanna Quillen tells us how you can save money even though car insurance rates have increased this year.
From groceries to mortgage rates, everything seems to cost more in 2024. You can add car insurance to that list.
Car insurance costs have been on the rise this year, leaving drivers paying more and searching for ways to save.
According to a report from Bankrate, the average annual premium of full-coverage auto insurance rose to $2,543 in 2024 — up 26% from the previous year.
Costs vary from state to state, but a local agent with A-MAX Auto Insurance in Irving said some policies have gone up by 30% in Texas.
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In other states like California and Missouri, coverage premiums went up by more than 40%.
Rates vary from person to person with differing circumstances, but on average, agents have been seeing increases happening since last year across many major carriers, as they try to stay up with the rate of inflation.
According to Bankrate, the national average of how much of their income a driver spends on full auto coverage is also up, at 3.41%. But in many states, drivers devote far more of their income towards car insurance. For instance, Floridian drivers spend 5.69% of their income on full coverage auto insurance, Michigan drivers spend 5.01% of their income, and those in Nevada — 4.91%. Louisiana, however, is the state where drivers spend the most of their income, putting 6.53% toward full coverage insurance.
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Besides inflation, the cost of cars has contributed to the higher cost of insurance. The cameras and sensors that are supposed to keep us safe are all more expensive to replace, even if it's just a fender bender.
Insurance companies are also factoring in population density in growing metros like DFW. They're also looking at weather patterns, which have been on the wild side just about anywhere you look in recent years.
Accidents are also a huge factor. Forbes recently ranked Dallas in the top 10 worst cities to drive in as well as one of the most likely places drivers will be involved in a car crash.
The Bankrate study lists the average annual premium in Texas this year at just over $2,600 or roughly $220 a month. That means some families are paying hundreds of dollars more on annual policies for 2024.
"So just like the price of groceries and the cost of living is going up, your insurance rates are going to go up as well," said Jenan Chapman, district sales manager for A-MAX Auto Insurance in Irving. "It is difficult. Obviously, because of what we're getting paid and what our wages are here in Texas, they haven't increased. So it is difficult. Just the overall cost of living in general, everything is hard right now."
Agents say now might be a good time to re-assess and save some money.
- You might have to switch insurance providers to find a better rate for the amount of coverage you need.
- Check with your insurance to see if they're doing a safe driver program. They might send you a device that monitors your speed and overall driving.
- Work on improving your credit score because it lowers your risk assessment by an insurer.
- The type of car you drive might also be costing you more. If your rates are breaking the bank, consider a different vehicle.
- Additionally, keep in mind that having a teenage driver on your policy is just going to be expensive no matter what. Bankrate’s report shows the cost to insure a teen driver in 2024 is 23% higher than last year nationwide.
If your solution is to lower the amount of coverage to get a better rate, experts warn you to think again.
The numbers might look enticing. The report shows the national average cost for full coverage car insurance is $212 per month, compared to just $62 per month for minimum coverage.
However, minimum coverage can leave you financially vulnerable if you’re found at fault in a crash.
