Will Car Insurance Rates Come Down in 2024?

No, it's not just you; everyone's car insurance premiums are getting pricey. The latest Bureau of Labor Statistics data shows car insurance rates spiked 19.2% over the past year.

A few factors contribute to your monthly car insurance payment, including what state you live in, how much you drive, your age, what car you own, and your driving record. But the recent car insurance price increases are part of more significant insurance trends -- and it's unlikely they'll reverse anytime soon.

Here's why it's getting harder to find cheap car insurance and why it's likely to be expensive in 2024.

Why car insurance prices are through the sunroof

Just as there are a handful of factors that contribute to your individual insurance premium, there are several larger issues that are driving insurance prices up for everyone, including:

• Rising collisions: According to LexisNexis, automotive property damage severity rose 35%, and the severity of collisions rose by 40% between 2019 and 2022. Many people drove more recklessly in the wake of the pandemic, and some of those habits have continued, causing accidents to increase and pushing up the need for repairs.
• Higher vehicle prices: The prices of used and new vehicles have risen sharply over the past few years, making it more expensive to repair and replace vehicles when they're involved in an accident.
• Soaring vehicle repair costs: In addition to vehicle prices rising, the cost of repairs has also increased. Years of supply chain shortages and a lack of workers have increased the cost to repair a vehicle by 8.5% compared to last year.
• Some insurers have left states: Earlier this year, a handful of insurance companies left California because the cost of insuring people in the state was too high. Not only does that make it more expensive for people in the state who need to find a policy, but it can also drive prices up for customers in other states because there's a smaller pool of people paying their premiums.
• Auto thefts are near record highs: The latest data from the National Insurance Crime Bureau shows nearly 500,000 vehicles were reported stolen in the U.S. in the first half of 2023, up 2% from the same period in 2022 and a near-record high. That weighs on insurance companies who are left covering the cost of the loss.

Car insurance prices won't fall in 2024

Unfortunately, there isn't any relief for auto insurance premiums on the horizon. Many trends that have driven premiums higher are expected to continue through 2024.

The good news is that there are a couple of things you can do to get a better deal and find the best car insurance company for you:

• Shop around: One of the most effective ways to lower your premiums is to shop around for insurance. For example, if you've been in multiple accidents or are a younger driver, getting quotes from high-risk car insurance companies could help you find the best price for your specific situation.
• Choose low mileage coverage: Some insurance companies offer discounts to customers who don't drive very far. If you work from home or are a stay-at-home parent, you may want to ask your insurer about this discount to see if it could save you money.
• Raise your deductible: This is a tried-and-true way to lower your monthly premiums; just know it comes at a price. If you're in an accident or your vehicle is totaled, you likely will receive less money from your insurance company than you would have if your deductible were lower.
• Bundle your insurance: This may be one of the easiest ways to save a little money on your insurance. Chances are you're paying for renters or homeowners insurance, and bundling it with your auto insurance could be a quick way to score a discount.

While car insurance prices aren't coming down soon, making a few changes to your policy or switching your coverage to another insurer could go a long way in keeping your costs under control.