Inflation: Car insurance prices up 17% since 2020, says study – Yahoo Finance


Drivers in the U.S. are paying about 17% more for their car insurance since 2020, according to a new study by Insurify. The average coverage for vehicles is now $1,750 per year.
Michigan drivers pay the most to insure their cars — an average of $2,510 per year. That's about 55% higher than the average $762/yr paid by vehicle owners in Hawaii, the least expensive state for coverage.
Inflation, traffic accident rates, medical costs and vehicle repair prices all played a role in increasing premiums.
"While we saw the economy accelerate and demand rebound following the pandemic, Americans' overall cost of living, including insurance, increased in 2022 due to built up pandemic-related disruptions and increased inflation," Snejina Zacharia, CEO of Insurify told Yahoo Finance.
As for vehicles, the most costly to insure is the Infiniti Q5 at $3149. Tesla’s (TSLA) Model 3 is the second most expensive vehicle to insure at $3,040 per year.
Drivers have seen a steady increase for motor vehicle insurance with prices in September 10.3% higher than the same month last year, according to the Bureau of Labor Statistics' latest Consumer Price Index reading.
The study also found the most expensive cities to insure vehicles include:
Detroit: $4,593
New York, NY: $3,657
Warren, Mich.: $3,236
That compares to the cheapest car insurance costs found in the following metro areas.
Honolulu: $768 per year
Winston-Salem, NC: $820
Raleigh, NC: $929.
The study found location significantly impacts car insurance prices. Regional factors like mild weather, lenient local regulations, and minimal traffic congestion often lead to less expensive rates.
Rising insurance costs are altering driving considerations by policy holders. About 65% of drivers are considering driving less, according to a Insurify survey released earlier this year.
Some 30% of drivers surveyed are thinking about buying a hybrid or electric vehicle to cut back on costs. An astonishing 10% of vehicle owners are considering dropping their insurance coverage altogether, despite the legal risks of driving without insurance.
Ines is a markets reporter for Yahoo Finance. Follow her on twitter @ines_ferre
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