The Cost Of Car Insurance Jumped 24 Percent In 2023

Great news! Most Americans are paying less than $3 per gallon for gas! Unfortunately for us, that doesn’t mean we’re really saving much money overall since any potential savings are most likely being eaten up by an increase in the cost of car insurance. As CBS News reports, car insurance rose six times the rate of inflation in 2023. On average, the cost of full coverage rose to $2,019 per year. That works out to a 24 percent increase over 2022 when full coverage cost $1,633.

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As far as why this is happening, a lot of it has to do with problems caused by the pandemic. Car values are still inflated, and supply chain issues, as well as inflation, mean a lot of parts are more expensive. There’s also a mechanic shortage, which means repairs take longer, and insurance companies have to spend more money providing policyholders with rental cars. Climate change is also making things more expensive, as more frequent extreme weather events are damaging cars at a higher rate, leading to higher insurance premiums.

That said, certain states are a lot more expensive to insure a car than others. And it’s not necessarily the ones that you think. Michigan, for example, has a reputation for being an extremely expensive state to get car insurance because of its history of being a no-fault state. And yet, it’s currently only the ninth most expensive state, coming in at $2,640 a year. Washington, D.C. places sixth and comes in at $2,756, while third place Florida will cost you $2,917.

The winner, however, is New York, where you can expect to pay an average of $3,374 per year to keep your car on the road. Why anyone who lives in New York City even bothers owning a car, we have no idea, but it’s certainly not because car insurance is cheap.