Reports claim the average cost of full coverage car insurance will be $1,780 a year.
It seems many car owners are in for a rude awakening when insurance renewal arrives this year, a new report found.
Car insurance rates are expected to increase by 8.4% across the U.S. in 2023, shaping up to be the largest rate increase in six years. The average cost of full coverage car insurance is expected to be $1,780 per year, but rates will vary dramatically between states, a recent report found.
Vehicle owners in 45 states will see their rates increase by at least 1%, with rates jumping the most in Illinois, Arizona and New Hampshire, the report said. The states that will experience a rate increase below 1% include California, Hawaii, Vermont and Wyoming.
The significant nationwide price jump could be attributed to driving patterns returning to pre-pandemic life.
The price of a new car has surged nearly 8% over the past year, while the cost of tires and auto parts have jumped more than 10%, government data shows.
The pandemic-related price pressures tied to pent up demand and supply shortages arrive roughly three years after the outbreak of the coronavirus. The average car insurance rate jumped only 1.3% last year, reports found.
The rise of electric vehicles has also contributed to the price spike, since insurance costs total about 28% more for electric vehicles than gas-powered ones.