Car Insurance Rate Increases

Let's dissect the data to predict how much car insurance will cost moving forward.

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Why do car insurance rates increase?

Car insurance premiums have a nasty habit of rising each year — regardless of whether you've filed any claims. Why is that? Car insurance companies compensate for the money they pay out in claims per year through rate revisions. If an insurance company's claim payout total exceeded its premium revenue, it will often pass on those costs to customers the following year. On average, car insurance premiums increased by 2% between 2018 and 2019 — the most recent year for which data was available.

Let’s review the reasons behind car insurance rate increases.

avgpremiums_YoY.png

 

Why did my car insurance go up without an accident or ticket?

You can expect your car insurance premium to increase if you've committed any traffic violations, added drivers to your policy, moved, changed or upgraded insurance coverage, or added a vehicle. If none of these events have occurred and you haven't filed an insurance claim, you could be wondering what sparked your higher premiums. In such a case, you could be the victim of a rate increase. In order to fully understand insurance rate increases, it’s important to know how insurance companies set your home or auto insurance premium. Most of the information used by car insurance companies is historical data used to predict what their future losses — or claim payments — could be.

Auto insurers don’t use only your information to create your profile. They also rely on related data, including your location, vehicle, age, credit score, and other factors to create a pricing profile. If you live in an area in which insurers experienced a higher loss-to-profit ratio than usual last year, you might experience a rate increase to account for the insurance company’s loss.

Common car insurance rate increase triggers include:

Although it might seem unfair to suffer a rate increase without any moving violations, it's an unavoidable byproduct of how the auto insurance industry operates. Insurance companies need to maintain return-on-investment and minimize risk in order to stay viable. If they had to pay a greater number of claims than expected, they'll need to compensate for that with higher rates.

Insurance companies do sometimes enact "rate decreases," in which the company reduces rates for some customers after the company enjoys a particularly profitable period. While rate decreases don’t happen as frequently as rate hikes, they do occur.

 

Auto insurance trends: how much will car insurance cost next year?

While we can’t predict the future, we can use historical data to inform our predictions. Over the past seven years, car insurance prices have risen significantly. The table below shows average annual car insurance costs and percent changes from the previous year.

 

Year Average Annual Premium % Change YoY
2011 $1,194  
2012 $1,276 6.90%
2013 $1,195 -6.30%
2014 $1,229 2.80%
2015 $1,280 4.20%
2016 $1,368 6.90%
2017 $1,437 5.00%
2018 $1,521 5.8%
2019 $1,548 1.8%

 

Looking at car insurance rates by region shows discrepancies based on geography. Some regions enjoyed rate decreases, while others endured significant premium increases. It all comes down to location.

  • From 2011 to 2019, Oklahoma saw the greatest decline in auto insurance rates, with 2019 rates 7.9% lower than they were in 2011. However, from 2018 to 2019, premiums in Oklahoma increased by nearly 13%.
  • Colorado saw the greatest rate hike from 2011 to 2019, with auto insurance premiums 86% higher in 2019 than they were in 2011. This trend was maintained in 2018 to 2019, increasing another 3.4%.
  • Alaska saw the smallest change, with only a 1% net change between 2011 and 2019. The state did experience some year-to-year rate fluctuations during this period.
  • On a national level, rates only increased by 1.8% from 2018 to 2019 — a $27 increase in yearly auto insurance premiums.
  • Texas saw rates decrease the most from 2018 to 2019 by nearly 21%, a $365 decrease year-over-year.
  • Some states — 18 of them — enjoyed rate decreases from 2018 to 2019. Only ten states saw decreases between 2017 and 2018.
  • The Rocky Mountains saw the largest rate hikes from 2011 to 2019 at 64%. New England saw the smallest increases from 2011 to 2019, at only 3.6%.
  • The largest change in rates from 2018 to 2019 was seen in the Southwest region with a 10.2% decrease — like related to the large decrease seen in Texas.

 

Region 2011 vs 2019 % Change
New England 13.34%
Far West 43.61%
Mideast 11.24%
Plains 42%
Southeast 34.60%
Rocky Mountain 63.83%
Southwest 7.73%
Great Lakes 39.24%

 

Looking at geography alone only paints a portion of the picture. Because car insurance is regulated at the state level and rated on a ZIP-by-ZIP basis, it's highly unique. As there are more 50,000 zip codes in the US, our analysis sticks to specific states for the sake of brevity.

 

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Average auto insurance rate increases by state

At the state level, the past eight years have brought significant insurance cost changes.

State 2011 vs 2019 % Change 2018 to 2019 % Change
Alabama 13.36% -0.53%
Alaska -1.25% 5.31%
Arizona 42.96% 6.60%
Arkansas 49.29% 8.40%
California 56.97% 1.62%
Colorado 86.12% 3.36%
Connecticut -3.98% 6.73%
Delaware 11.66% -3.94%
District of Columbia 4.45% -12.53%
Florida 69.06% 9.60%
Georgia 18.76% 0.96%
Hawaii -5.52% -6.79%
Idaho 47.68% 8.85%
Illinois 59.16% 3.66%
Indiana 26.14% -1.96%
Iowa 31.53% 9.51%
Kansas 55.03% 5.44%
Kentucky 23.98% 9.40%
Louisiana 55.36% 0.46%
Maine 3.42% -0.25%
Maryland 13.54% 5.23%
Massachusetts 16.61% 10.21%
Michigan 39.47% 7.34%
Minnesota 13.10% -3.04%
Mississippi 41.33% -1.05%
Missouri 73.33% 9.98%
Montana 55.85% 6.15%
Nebraska 54.21% 7.82%
Nevada 33.02% 3.67%
New Hampshire 25.94% -8.41%
New Jersey -1.60% -6.99%
New Mexico -4.41% -4.48%
New York -2.78% -2.53%
North Carolina 35.12% -1.35%
North Dakota 11.32% 1.58%
Ohio 27.00% -0.44%
Oklahoma -7.86% 12.69%
Oregon 49.54% 1.94%
Pennsylvania 44.29% -0.35%
Rhode Island 53.74% -5.30%
South Carolina 21.01% -0.05%
South Dakota 53.07% 21.93%
Tennessee 64.11% 4.27%
Texas 12.87% -20.47%
Utah 51.19% 10.01%
Vermont 20.30% 4.74%
Virginia 11.74% 4.40%
Washington 28.09% 8.94%
West Virginia 8.13% 0.49%
Wisconsin 48.31% 6.12%
Wyoming 51.78% 3.48%

 

Which car insurance companies have increased rates recently?

While it’s nearly impossible to track down specific rate changes for every insurance company, most major insurers factor rate increases into their premium calculations. Since rate increases aren't consistent across the industry, it's important to find the company that will increase your rates the least. The only real way to do this is to shop around for an insurance policy with the cheapest rates. Remember, the rate increase is dependent on the previous year’s return-on-investment — you'll need to consistently shop for car insurance every six months to ensure the cost of your car insurance premium doesn't go up.

 

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Recent Questions:

Should I file a claim for $3,000 with a deductible of $1,000?

There's a couple of things to think about. With the value of damage and your deductible, the most you would save by filing a claim is 2k.
Dec 16, 2018 Sacramento, CA

What's the average rate increase for a collision claim?

Sorry to hear about your accident. You shouldn't need to get a police report if you were at fault and will be filing as a collision claim.
Jul 9, 2019 Atlanta, GA

My insurance company held me 10% responsible for not taking "evasive action." Will the 10% charge likely cause a higher rate elsewhere?

Anytime you are found liable in an accident it will impact rates. In this case, you were only found 10% liable, so it will not impact your rates as much as if you were 100% liable.
Aug 11, 2019 New Orleans, LA

How can I get a not at fault accident charged off my driving record?

If your insurance company has to pay out on a claim, it will impact your rates. If you have uninsured motorist coverage, the accident will only stay on your record for 3 years and will not impact your rates as much as if you don't.
Oct 3, 2018 Houston, TX

Ava Lynch
Ava LynchSenior Analyst

Ava worked in the insurance industry as an agent for four-plus years.

Ava currently provides insights and data analysis as one of The Zebra's property and casualty insurance experts. Her work has been featured in publications such as U.S. News & World Report, GasBuddy, Car and Driver, and Yahoo! Finance.

About The Zebra

The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.

  • The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.

  • The Zebra’s insurance content is not subject to review or alteration by insurance companies or partners.

  • The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.

  • The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.