If your latest bill for car insurance hit you hard in the pocketbook, you’re not alone.
Auto insurance rates nationally increased 15% last year, according to a new report from Insurify, a website for auto insurance quotes.
In Georgia, rates increased even more — 21% — and car insurance costs are the 10th highest in the nation, Insurify said.
What’s causing rate hikes
Rates increased nationally last year due to increased costs to repair vehicles, the result of more technology in cars like advanced driver-assistance systems and growth in electric vehicles, the report said.
Insurance for nine popular EV models increased twice as fast as comparable gas-powered cars, making EV insurance 23% more expensive than similar vehicles powered by internal combustion engine, according to Insurify.
EVs often cost more to buy, though maintenance costs are generally lower. But the cost to repair an EV after an accident averages $6,066, nearly 30% more than for gas-powered vehicles, according to the report.
Another factor driving higher insurance costs: Climate risk is increasingly being factored into rates because of “significant losses from severe weather events,” Insurify’s report said.
Credit: TNS
Credit: TNS
For example, flooding from Hurricane Helene, which ravaged Florida, Georgia, the Carolinas and Tennessee in September, damaged as many as 138,000 vehicles, according to Carfax estimates.
Florida had the most vehicles damaged due to Helene, but an estimated 16,800 vehicles in Georgia were also water-damaged, according to Carfax, a vehicle history information company.
Credit: John Spink
Credit: John Spink
Severe storms and hail are also driving more claims. Since comprehensive car insurance covers damage from flooding, hail, tornadoes, falling branches and wildfires, the level of climate-risk exposure in your area factors into those insurance rates, Insurify said.
But storms affect more than just car insurance rates.
“Although these large events certainly have an impact on auto insurers’ underwriting results, they’re generally not as impactful as they are to home insurers,” said Betsy Stella, vice president of carrier management at Insurify, in a written statement.
Insurance Information Institute spokesperson Mark Friedlander said other factors driving higher auto insurance costs are more accidents due to texting while driving, rising health care costs to treat people after accidents and a high volume of stolen vehicles in Georgia.
According to Friedlander, rates are also driven up by the high volume of lawsuits filed after a crash “as billboard attorneys market their services to consumers.”
“Frivolous” lawsuits are one of the targets of Gov. Brian Kemp’s push to pass tort reform legislation to limit lawsuit and curb giant jury verdicts.
Georgia rates increase
The cost of full-coverage premiums in Georgia last year was 22% higher than the national average, according to Insurify.
Insurify’s forecast is for an 8% increase for Georgia drivers in 2025, making it one of five states projected to have the largest increases this year.
The cost of full-coverage premiums in Georgia is expected to reach an average of $3,052 in 2025, up from $2,815 last year, according to the report.
That’s driven by hurricane damage and a high share of uninsured motorists in the state at 18.1%.
The Georgia Office of Commissioner of Insurance and Safety Fire did not immediately respond to requests for comment.
Rate hikes to slow in 2025
While drivers are paying more to insure their cars, hikes slowed in the second half of the year and this year Insurify expects car insurance rates nationally to grow 5%.
The Insurance Information Institute forecasts a 7% increase in average personal auto insurance rates nationally this year, compared with 12% in 2024 and 14% in 2023.
That comes as the insurance industry recovers from record underwriting losses in 2022 due to inflation, Hurricane Ian and other factors.
Rate hikes in Georgia also started to slow in the second half of 2024.
In July 2023, a new state law took effect giving Georgia’s insurance commissioner 60 days to review rate filings, which Insurify said “helps curb exorbitant rate hikes.”
Future trends
A report released earlier this month by LendingTree company ValuePenguin.com also forecast a slowdown in rate increases this year.
“Although rates aren’t expected to increase as steeply in 2025 compared to 2024, rates are still trending upward, and as a result, auto insurance payments will still be a financial strain for some in the new year,” said ValuePenguin.com insurance expert Divya Sangameshwar in a written statement.
And, if President Donald Trump moves forward with hefty tariffs on imported goods, “insurance rate hikes could speed up again,” she added.
That’s because 60% of replacement car parts are imported from other countries including China, and higher costs for parts could drive up repair prices.
That, in turn could result in more expensive insurance claims and rate hikes in future years.
Tips to save money on auto insurance
- Compare insurance quotes: Comparison shopping during each policy renewal is one of the best ways to save money on auto insurance. Drivers should compare prices from at least five insurers, or more if they have a recent incident that could raise rates even more.
- Research discounts: Bundling home and auto insurance policies reduce prices by 18%, and bundling multiple cars into one policy can offer savings of up to 25%. Insurance companies give discounts for taking a defensive driving course, for safe drivers who’ve been accident free for over five years and for drivers with low mileage use.
- Adjust coverage: Drivers looking to adjust their coverage can raise their deductibles, and removing optional coverage like roadside assistance, to bring down their car insurance costs.
- Improve credit score: Americans with a poor credit score pay as much as 88% more for car insurance.
Source: ValuePenguin.com
About the Author
