According to a recent report published by Insurify, car insurance rates saw a big change around the United Sates in 2024. The report shows that in California, auto insurance rates increased by almost 50%. This brought the average full coverage cost to around $2,575 annually. Per the numbers shown in the report, this is around 11% higher than the national average annual price. You would think that this means California has the highest, or at least one of the highest, insurance rates in the country. However, Insurify actually shows that not only is California not the state with the highest prices, but also it is not even in the top 10.
A number of factors contributed to the steep increase in California.
The two largest contributing factors were legislation and climate risk. According to breakdowns of the increase, these two factors equate for a combined 48% increase, meaning they are responsible for nearly the full rate increase. Additionally, California doubled the mandatory liability limits that all drivers must follow, which created increases across the board. Prior to these changes, California had some of the lowest requirements in the country, being one of the five states with the lowest requirements.
Another factor to consider is the pause placed on insurance rates in the state.
The California Department of Insurance put a freeze on insurance rates for two years during the COVID-19 pandemic. Because of this, many insurers feel as though they are playing catchup, hence why they skyrocketed their premiums within one year. Also due to the freeze, some insurers entirely pulled out of California and no longer offer their services to California registered drivers. The catchup and leaving the state are due to the fact that during the freeze, the cost of nearly everything else increases, leaving insurance companies to have larger payouts.
Predictions show moderate increases for 2025 for California.
Insurify predicts that there will be a 6% rate increase in 2025. While this is still a notable price increase, it is significantly lower than 2024’s numbers, which will bring much relief to California drivers.
Insurify shows Maryland as the state with the highest rates.
The average full coverage rate in Maryland is around $4,060. This is $1,485 more than the average cost in California. Accompanying Maryland in the top ten ranking are New York, Washington D.C., South Carolina, Florida, Delaware, Nevada, Louisiana, Colorado, and Georgia. Each state has rates that are at least several hundred dollars higher than California. Furthermore, while California saw a large increase, it was not even the largest in the nation. Minnesota saw an increase of 58% last year, having more than doubled the price of full coverage auto insurance.
