Business & Tech
54% Car Insurance Spike Expected In CA For 2024
The state has already experienced a 45 percent year-over-year increase, and it's going to get worse.
CALIFORNIA — Car insurance rates in California are projected to see a 54 percent annual increase in 2024, with the average cost per year for coverage topping out at $2,681, according to a recent analysis by Insurify.
The state has already experienced a 45 percent year-over-year jump, from $1,666 in June 2023 to $2,417 in June 2024, according to the insurance website, which cited climate change, increased car thefts and new legislation as reasons rates are going up nationally.
“During COVID-19 shutdowns, states like California put a freeze on rate increases. That’s why so many people saw drastic rate hikes in 2023 after those restrictions were lifted,” said Mallory Mooney, director of sales and service at Insurify, according to the website. “Insurers are still playing catch-up, and it’s too little too late for a lot of them. Insurers have had to pull out of some markets completely.”
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California is also increasing minimum car insurance requirements to align with other states, with a late 2022 law doubling and tripling liability limits, according to Insurify, which added that the change will go into effect Jan. 1, raising premiums even higher.
Nationally, Insurify projected that car insurance rates will increase 22 percent in 2024, less than the 24 percent spike they saw in 2023. As of June, the average annual cost for full coverage was $2,329, but it is expected to end the year at $2,469.
Find out what's happening in Across Californiawith free, real-time updates from Patch.
“Insurers implemented higher rate increases to account for changes in the frequency and severity of auto losses,” said Betsy Stella, vice president of carrier management and operations at Insurify, according to the website.
“The COVID-19 pandemic and following inflation, especially in the price of vehicle maintenance and repairs, along with changes in driving behaviors, led to new loss trends that increased the difficulty of rate setting.”
Maintenance and repairs cost almost 38 percent more than they did five years ago, according to Insurify, citing the U.S. Burea of Labor Statistics.
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