2024 insurance insights: Our expert forecast and what it means for you

Predicted escalating costs and coverage constraints will likely impact insurance accessibility

Updated January 16, 2024

Table of contents:

Average cost of auto insurance is rising
Increases vary based on where you live
Fewer options for coverage
Ways to save
Methodology

The year 2023 saw a lot of changes in the insurance market. For some, insurance was harder to come by. For many, it was just one more rising price, pushing up the cost of living.

But now it's a new year. We can't know for sure what 2024 will bring, but we want to provide a few predictions from our insurance experts.

This year, consumers can expect to see some big changes in the market including higher prices continuing to rise and likely continued difficulty aquiring insurance in certain geographies.

Average cost of auto insurance is rising

The average annual cost to insure a car in the United States was $1,841 in 2023. That's a 5% increase over the previous year. (Of course, between 2022 to 2023, there was a 15% jump, so you may still be feeling the double digit increase).

We predict a continued increase in 2024.

Why is insurance continuing to rise? There are several reasons.

Inflation and other economic factors. Just as the cost of a gallon of milk has increased, so too have auto parts and repairs, making claims more expensive to pay out.
Extreme weather and natural disasters. These have led to expensive payouts from insurance companies who now need to increase prices to remain profitable.
Government regulation. Insurance is a state-regulated industry, meaning the government can control how high insurance companies can raise rates. When it's a long time between rate increase approvals, it can lead to sudden jumps.
Increased car thefts. As insurance companies have to pay out more for increased thefts, they also have to raise prices to offset these costs.

Hunter Black, one of The Zebra's seasoned insurance agents, explains: "I can say rates are high due to the record amount of catastrophic weather events over the last few years. Also, insurance carriers gave out stipends during Covid, and saw record auto claims once the pandemic ended due to more cars on the road. All of this affected insurance carriers' loss ratios in a negative way, so increasing rates will help recover those losses."

Increases vary based on where you live

In addition to individual factors like how you drive, where you live can be one of the biggest factors in how much you pay.

The states with the highest annual premiums are Florida and Louisiana both with an average premium of over $2,700 per year. That's 47% more than the national average.
The states with the lowest premiums are Vermont and Idaho, both with annual premiums 35% below the national average.
19 states now pay an average of more than $2,000 a year in auto insurance premiums.

Annual auto insurance premiums by state

State	Average annual premium
Alabama	$1,792
Alaska	$1,971
Arizona	$1,876
Arkansas	$2,066
California	$1,941
Colorado	$2,204
Connecticut	$1,931
Delaware	$2,320
Florida	$3,038
Georgia	$2,039
Hawaii	$1,399
Idaho	$1,224
Illinois	$1,623
Indiana	$1,338
Iowa	$1,377
Kansas	$1,921
Kentucky	$2,758
Louisiana	$2,793
Maine	$1,299
Maryland	$2,129
Massachusetts	$1,432
Michigan	$2,312
Minnesota	$1,704
Mississippi	$1,801
Missouri	$2,100
Montana	$2,024
Nebraska	$1,754
Nevada	$2,293
New Hampshire	$1,410
New Jersey	$2,030
New Mexico	$1,815
New York	$2,197
North Carolina	$1,236
North Dakota	$1,711
Ohio	$1,334
Oklahoma	$2,097
Oregon	$1,611
Pennsylvania	$1,894
Rhode Island	$2,390
South Carolina	$2,148
South Dakota	$1,665
Tennessee	$1,668
Texas	$2,115
Utah	$1,741
Vermont	$1,173
Virginia	$1,593
Washington	$1,859
Washington, D.C.	$2,207
West Virginia	$1,748
Wisconsin	$1,388
Wyoming	$1,590

Fewer options for coverage for some

Much as where you live can affect how much you pay for insurance, it can also affect the insurance options you have. In some states, the prolifieration of weather events has meant insurance companies are not writing new policies. We have a more specific article on this ongoing crisis and what is being done, but suffice is to say, we don't predict 2024 will bring an end to the root cause: extreme weather caused by global climate change.

What you drive can also affect what coverage you can find. In 2023, some major insurers dropped coverage for Kia and Hyundai cars due to an increase in car thefts of certain models. While the automakers have made attempts to fix security vulnerabilities, thefts for these vehicles remains high.

Ways to save

Rising prices can get anyone down, but consider your options for still keeping your auto insurance affordable.

Bundle your home/renters/condo insurance policy with your auto policy for savings.
If you're a safe driver, look into telematics programs that can help you save based on your driving.
Consider all possible discounts that might apply to you.
Shop around to make sure you're getting the best rate with your current carrier.

While 2024 may not look like it will see major drops in insurance prices (and likely quite the opposite), you can take control this year by staying abreast of industry trends and looking for new opportunities to save with your current carrier or by switching.

Methodology

The auto insurance rates displayed throughout this page come from The Zebra’s Dynamic Insurance Rating Tool, a proprietary insurance premium estimator that uses the most recent rate filings across the United States at the ZIP code level to provide the most recent and up-to-date rate data. This data comes from Quadrant Information Services, which sources the most recent and approved rate filings across insurance companies in every state from S&P Global.

Rates are based on a sample driver profile — a 30-year-old single male driver with a Honda Accord and full coverage at these levels:

$50,000 per person/$100,000 per incident for bodily injury liability
$50,000 per incident for property damage liability
$500 deductibles for collision and comprehensive coverage

To provide insight to consumers on how specific personal factors (like age, location and coverage level) can affect your premium, this base profile is then adjusted for different factors commonly used by insurance companies.