The past year has been tough. Cars got more expensive. Gas got more expensive. Now we know for certain what most of you had probably suspected — car insurance got more expensive in 2022, too.
Bankrate reports that the average car insurance rate “increased 13.72 percent between 2022 and 2023.”
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Nationwide, Bankrate reports, “drivers spend an average of 2.93 percent of their income on car insurance in 2023. This is up from 2.57 percent” the year before. Nationwide, the average policy costs Americans $2,014.
New Yorkers have it worst, with an average annual premium of $3,139 this year — 5.05% of the average driver’s income, according to Bankrate. Maine residents pay the least, at $941 per year.
Of course, the density of cars drives the frequency of accidents. We would expect largely rural Maine to have affordable insurance.
But New York drivers are used to high premiums. Illinois customers faced the biggest shock — their premiums increased 16.67% in one year. At the other end of the scale, New Jersey drivers saw their costs fall by 7.24%, or $137.
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Location isn’t the only factor driving insurance rates. Adjusters also consider your driving record, credit score, age, and the make and model of the vehicle you drive. “A BMW 330i has an average annual premium that is $780 more than that of a Honda Odyssey, for example,” Bankrate says.
In 2023, the company predicts, rates will keep rising.
Assistant Vice President of State Affairs for the National Association of Mutual Insurance Companies (NAMIC) Jon Schnautz told Bankrate that “inflation is manifesting in the cost of repair parts, labor and medical care.”
Cars are growing more expensive — the average new car last month cost $49,507, about 5% higher than the year before. They’re also growing more expensive to repair as automakers add more automated features, many of which use sensors mounted near the car’s exterior where they are vulnerable in even minor accidents.
