Car insurance rates jump 26% across the U.S. in 2024, report shows
Having a car is getting more expensive for drivers across the country as auto insurance premiums continue to soar.
According to a new Bankrate report, U.S. drivers are paying an average of $2,543 annually, or $212 per month, for car insurance — an increase of 26% from last year. That's 3.41% of yearly earnings for those with a salary of $74,580, which is the national median household income according to the latest data from the U.S. Census Bureau.
"Auto insurance rates have been rising at a breakneck pace," said Greg McBride, chief financial analyst for Bankrate. "And though the pace of increases will eventually slow, that doesn't mean premiums are coming down."
Bankrate's report looks at car insurance costs as a percentage of household income throughout the U.S., to determine the true cost of auto insurance.
What's driving the surge in car insurance prices?
In addition to inflation, there are other factors beyond a driver's control, such as weather and population density, that play a large role in the price of their insurance. For this reason, car insurance rates are greatly affected by where a person lives, the report finds.
Throughout the country, auto insurance costs have continued to climb over the past few years as natural disasters have become a greater threat to drivers and as vehicles prove more costly to repair and replace. That said, the states where the true cost of car insurance appears to be highest are those frequently slammed by natural disasters such as tornadoes and hurricanes.
In Louisiana and Florida, for example, where severe weather events have become increasingly common over the past several years, drivers are forking over the largest share of their paychecks toward their car insurance than drivers in any other state — an average of 6.53% and 5.69% respectively.
Auto insurance premiums take the smallest bite out of household incomes for drivers in Massachusetts, where state law prohibits the use of age as a rating factor for setting premiums, according to Bankrate. Customers in the Bay State on average pay just 1.76% of their income toward insuring their vehicles.
Missouri saw the largest increase in insurance premium prices this year, according to Bankrate: Drivers in the Show-Me State are spending an average of $2,801 per year on auto insurance in 2024, a whopping 40% more than what they shelled out for coverage last year.
Drivers in one state actually saw premiums drop this year. The cost of insuring a vehicle in Wyoming fell $1 from 2023 to 2024, resting at $1,581 a year, Bankrate analysts found.
Still, the cost of auto insurance is likely to continue to rise throughout the country as "extreme weather, poor driving habits and high repair costs … continue to impact rates," the report reads.
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Elizabeth Napolitano is a freelance reporter at CBS MoneyWatch, where she covers business and technology news. She also writes for CoinDesk. Before joining CBS, she interned at NBC News' BizTech Unit and worked on The Associated Press' web scraping team.