Individual results may vary, but for many 2021 was not the best year. Year 2 of the COVID-19 pandemic came equipped with political turmoil, historic weather events and…rising insurance rates.
Insurance getting more expensive is generally something we can rely on right alongside death and taxes, but in 2020 things changed. For the first time since 2013, rates actually went down.
The reasons for that were directly connected to the COVID pandemic. People were driving less and filing fewer claims, so rates were lower.
However, in 2021 things started to return to normal. And so car insurance rates rose 3% from 2020 to 2021 and will likely continue to rise in 2022.
On average a driver in the United States paid $1,529 for car insurance in 2021.
Where are rates rising and falling?
Now the above numbers represent the average driver in the U.S., but you don’t care about the average driver in the U.S. You likely want to know what the rates are doing where you live.
Insurance rates are different everywhere. They’re based on a number of risk factors and calculations insurance companies do to try to predict how many claims will be submitted in that area.
While rates will vary not just from state by state, but also by city and can even be vastly different just a few blocks apart, the map above will give you an idea of how things are in your state. It specifically shows where rates rose and fell in the last year. The states in red saw an increase year over year, while the states in grey saw a decrease.
Why are rates rising?
As the world opened up a bit in 2021, after shutting down for much of 2020, people started driving again. And people driving more means more accidents and more insurance claims.
The Federal Highway Administration shows that vehicle miles traveled in the first half of 2021 increased by 173.1 billion miles or about 13% over the same period in 2020. There was also an increase in speeding and in traffic fatalities from 2020 to 2021.
The past year was also an intense one for weather and natural disasters. Wildfires, flooding, hurricanes and hail storms caused widespread damage to both cars and personal property in 2021.
What this means for you in 2022:
We can’t predict the weather or what new twists and turns will occur in the pandemic, but we can predict that in 2022 rates are continuing (and will continue) to rise. People are still driving more and insurance companies are raising rates to account for increased losses.
What demographic factors affect your rates?
So you’ve seen that where you live is a huge factor in what you pay for car insurance. But for people in many states, this is only one piece of the puzzle in what decides your personal rate. Many states allow insurance companies to also consider demographic factors including your age, gender, credit score, education level, marital status and occupation.
Here are a few fun facts about how who you are can affect your insurance:
Men and women pay different rates for insurance. Nationally, this distance is tiny, but if you live in certain states it can be a major factor. For example, women pay 6% more than men for insurance in Oregon. Men pay 4% more for insurance in Vermont.
While some states have outlawed it as a factor, in many places credit score can make a big difference in your rate. Improving your credit score one tier can save an average of 17% on car insurance.
Getting married can save you up to 12% on your car insurance in some states, although the national average is more like 6%.
Age is also a big factor in how much you pay. 16-19 year olds pay the most of all age groups in every single state. The biggest jump is from age 18 to 19 when drivers can save a whopping 23% on average.
What this means for you in 2022:
While obviously many of these demographic factors are things you can’t change — or likely won’t change just based on the insurance savings — there are some work-arounds. For example, if you have a particularly responsible teen driver on your policy, you could use a telematics device so that their actual driving is taken into account, not just the numbers of candles on their last birthday cake.
How does what you drive affect your rate?
Chances are you didn’t pick your car based on how much it costs to insure it, but insurance rates can vary significantly based on your chosen ride.
How old it is: A used car is cheaper to insure than a new car. Nationally, auto insurance drops about 5% for each year your car ages. In 2021, a 5-year-old model could save an average of 27% a year on car insurance.
Vehicle type: Vans have the lowest premiums of all car types at an average of $1,483/year nationally. Cars are the most expensive to insure nationally at $2,059/year.
Vehicle make and model: In 2021, for both new vehicles and 4-year-old models, Fiat is the cheapest vehicle make to insure and Maserati is the most expensive.
Do you have any anti-theft devices on your car? They might help keep your car from getting stolen, but they likely won’t save you much money. In 2021, there was no anti-theft device that saves more than 1% on your insurance rate.
What this means for you in 2022:
Car insurance savings can add up significantly over time and factors like the age of your vehicle will always affect what you pay. If buying a new (or new-to-you) car is in your plans for 2022, it’s already likely to be more expensive — one recent story puts the average cost of a used car at $29,000! You should consider how your new ride will affect your insurance rates as part of its total cost of ownership.
What are some ways to save on car insurance?
This is probably the question you care about most. If car insurance rates are rising in many places and for many people: what are some methods for bringing them back down for you personally?
Always check with your car insurance company for any discounts that might apply to you. You can also save by purchasing your policy in advance and sometimes for paying online. If you’re a homeowner, you can also often save 5-10% by bundling your auto policy with your home insurance policy. And you can also often save by maintaining continuous coverage and not letting it lapse even for a day.
But the biggest thing to remember about how to save money on car insurance? Compare and shop around. If you don’t periodically look at your options, you might well be missing out on a lower rate from another carrier.
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