Auto insurance costs are about $100 more than last year, but around $700 more than in 2019, before the Covid-19 pandemic began, industry data shows.
According to a Bankrate study, a typical motorist will spend $1,771 on car insurance this year, which is up about $100 from 2021.
However, this figure is up from annual premiums of $1,070 in 2019, according to the National Association of Insurance Commissioners.
Experts are noting the significant insurance increase in light of overall higher costs for buying, fueling, and servicing a vehicle.
According to the U.S. Labor Department, the average price of a new car is up 12 percent from a year ago. While the average new car now costs about $46,404, even used cars have increased 41 percent in the past year.
Meanwhile, gas prices recently hit record highs of $4.33.
The Bankrate study found that while drivers in Boston and Seattle pay the least for car insurance, drivers in Miami, Tampa, Fla., and Detroit pay the most.
Experts say the most important way to save money is to comparison shop, because each company will offer something different.
Other factors in insurance rates, according to experts, include:
- Driving record
- Coverage selections
According to the study, low credit score, a recent speeding ticket, and adding a teenager to a policy will also increase costs.
One study found that even if drivers have identical driving records, those with very poor credit pay an average of 114 percent more than those with exceptional credit for the same policy.
The study concluded that having bad credit is more expensive than if a driver had committed the worst traffic violations.
Not all states factor in credit score, though. California, Hawaii, Massachusetts, Michigan, and Washington have banned insurers from using a consumer’s credit score to determine their rate.
However, the higher premiums today are a reflection of the increased cost of car parts due to pandemic-related supply issues, according to industry reports.
When many drivers were staying off the roads in 2020 due to layoffs and stay-at-home orders, consumer advocacy groups urged insurers to issue insurance refunds.
Now, drivers are back on the road — and the number of accidents has increased, too.
Many experts don’t see insurance rates going down anytime soon, especially with the lingering supply issues.
Depending on where a driver lives, experts urge them to shop around for the best rates, ask about discounts, and keep their credit score in check.