Expected car insurance costs in California, Missouri and Minnesota this year. Insurers are blaming damage from severe storms and wildfires. Across the U.S., premiums are expected to go up 22%. Check your state here.
Sky-high car insurance rates? Blame it on all the tech in our cars
My car insurance just went up 32%. Did I have an accident or get a few tickets? Nope. Since 2020, car insurance rates in the U.S. have risen by a whopping 37%. The main reason? High-tech vehicles — aka anything remotely new — cost way more to repair. And you don’t need to have a high-tech car to feel the pinch. It’s hitting everyone.
Driving up costs
Our cars are packed with dozens of sensors and endless lines of computer code. Combine that with the rising cost of replacement parts and repairs, and voila, soaring auto insurance rates.
Look at these numbers from Bloomberg. They say that EVs are part of what’s driving costs. For a gas car, the average repair bill is around $4,437. The average for an electric vehicle is $6,618.
No wonder the average collision insurance claim jumped by 64% between 2018 and 2022. In 2023, auto insurance rates jumped another 20%, the biggest increase since 1976. Don’t even get me started on how much new and used cars cost right now.
Let’s look under the hood
In 2018, Toyota redesigned its uber-popular Camry. The number of parts in the front bumper alone increased from 18 to 43 — most are related to advanced driver-assist features.
The upgrades also mean a front-end collision repair is 43% more expensive. It’s not just driver-assist jacking up costs.
- Lots of new cars have LED headlights, which cost around five times more than halogen lights to replace.
- New cars contain more aluminum. Compared to steel, aluminum is lighter and provides better gas mileage and more protection in a crash — but harder and more expensive to fix.
- EVs take 20 days, on average, to repair. That’s 40% longer than traditional vehicles and $500 more expensive for labor.
Smart ways to save
I make it my business to find the best ways to save. Then, I pass them along to you. Let’s do this.
- Review your current plan and make adjustments to your coverage. Raising the deductible could result in a significant decrease in your premium. Keep in mind you’ll pay more out of pocket if you get into an accident.
- Ask for discounts. You might get one if your car has an anti-theft system installed, you’re a safe (accident-free) driver, or you’ve completed defensive driving courses. Talk to your agent.
- Consider switching to usage-based insurance. If you don’t drive that much or have a relatively short commute, you could pay much less than you would under a traditional plan.
- Bundle with other insurance plans from the same provider. Carrying home, auto, life and even pet insurance under one company means better rates.
Drive a Kia or Hyundai? You might have a hard time getting insurance
Did you know the type of car you drive may impact whether you can get insurance? Like how a smoking habit may affect your health insurance, a lack of safety features might put you in a pickle. If you drive certain Kia or Hyundai vehicles, pay attention. Some insurance companies are refusing these car owners a policy at all.
Get an alert if your vehicle is recalled with this free app
Maintaining a car is a lot of work. Not only do you have to keep an eye on your mileage and get routine service work done, but you also have to stay on the lookout for recalls of parts that can leave you stranded or in danger.
Beware of cheap car insurance that could put your privacy at risk
Car technology has been getting more and more advanced lately. You can do things like make phone calls through your car’s audio system, play music from your phone and get directions to appear right on your dashboard.