Why Did My Car Insurance Go Up?

If you’ve noticed your car insurance costs have gone up, you’re not alone. In the past three years, labor shortages, inflation and inclement weather have all contributed to an increase in insurance costs of nearly 50% nationwide — but changes in your driver profile might also be impacting costs. 

Reasons for a car insurance rate increase

1. Inflation

Inflation is a major factor in recent car insurance rate hikes. As the costs of medical care and vehicle repairs rise, auto insurance claims get more expensive and insurance companies pass those increased costs on to consumers.

Industry experts expect insurance costs to remain high through 2025, so it’s likely that most drivers will see their car insurance premiums rise yet again at their next policy renewal.

2. Supply and labor shortages

The pandemic created significant supply chain issues worldwide, leading to shortages of replacement parts and a decreased number of vehicle repair technicians — two problems people are still dealing with.

The National Automobile Dealers Association (NADA) estimates that there is still an annual shortage of nearly 40,000 auto repair technicians. This has helped create a perfect storm for high repair costs — and subsequently, more expensive auto insurance claims.

Learn more: Why is my car insurance rate so high?

3. Adverse weather

You may notice higher rates if you live in an area that’s prone to natural disasters. Auto insurance companies charge more in these areas because they have a higher risk of having to pay out claims.

Some states are already seeing the effects of this. According to FEMA, California, Texas, and Florida have seen some of the highest number of natural disasters in the last 20 years. Some car insurance companies have actually pulled out of these states entirely, citing severe weather as one of the main causes. 

4. Driving record

Insurance companies are known to raise rates after an at-fault accident, but they may also raise them after minor infractions or not-at-fault accidents.

Any violations or claims can cause your insurer to consider you more likely to file a claim in the future, so they raise your rates to compensate for that increased risk.

Based on our Jerry customer data, this is how much insurance rates can cost if you’ve been charged with one of the following traffic violations compared to the average range of $50 to 90 per month for minimum liability insurance.

5. Credit score

Your credit score is often a factor that helps determine your car insurance rate, so if yours has changed significantly, your preumium may reflect that.

If your credit score has dropped recently, you may have noticed that your insurance rates have gone up. In all but three states — California, Hawaii and Massachusetts — your credit history can play a large part in how much you pay for car insurance. 

Data shows that drivers with a lower credit score are statistically more likely to file an insurance claim, which is why rates can be higher for those consumers.

6. Your car

If you’ve recently purchased a new car or added another vehicle to your policy, you may have seen an increase in your rates. New cars tend to come with upgraded interiors, better parts and high cost of repairs, which often makes them more expensive to insure than older models. 

But even if you haven’t changed vehicles, your car could still be a factor in why your insurance rates have gone up. Vehicles that are prone to theft are prime targets for higher premiums — and motor vehicle theft remains a risk. In the first half of 2024, motor vehicle theft remained higher than 2022 levels, but has happily decreased compared to 2023.

7. Location

Location can play a huge role in how much you pay for a car insurance policy, so if you’ve recently moved, you may have noticed an increase in your premiums. For example, motorists in heavily populated cities like Dallas, New York or Miami, will see heftier bills than someone in a smaller city.

There are a few reasons for this:

• Larger cities have more traffic, which means a greater chance for accidents. 
• Drivers in urban areas are more prone to be victims of motor vehicle theft and vandalism.

Our experts analyzed the cost of car insurance in cities with high and low population densities to see the impact on auto insurance premiums:

8. Age

Teenagers and seniors pay some of the highest auto insurance rates in the nation. Not only are both groups more susceptible to car accidents, but senior drivers are more likely to suffer serious injuries in the event of a crash.

Rates tend to lower when younger motorists reach the age of 25. They’ll typically stay low for good drivers through middle age, then start to rise again once a driver reaches the age of 65.

Let’s take a look at how much different age groups pay for car insurance — and just how different those costs can be, even for state-mandated minimum insurance coverage.

9. Change in driving habits

A change to your driving habits — such as commuting longer distances or driving more frequently — can significantly impact your car insurance rates. Insurance companies consider the amount of time you spend on the road and your exposure to hazardous conditions when determining your premium.

Other factors

Several other factors also impact car insurance costs, including: 

• Adding new drivers: If you add a spouse with a spotty driving record or a teenager to your policy, their driving history could raise your rates — even if your record is clean.
• Changes in discounts: If you lose access to a car insurance discount, like those for good drivers or good students, your rates could climb as a result.
• Marital status: Married couples tend to pay less for car insurance, so if your marital status changes, your car insurance rates could also change.
• Lapse in insurance: You may pay more to reinstate or start a new policy if you’ve had a coverage gap.
• Comprehensive claims: Comprehensive insurance covers repair costs unrelated to a collision, such as from a weather event, theft, vandalism or even hitting an animal while driving. In some states, making a comprehensive claim can hike your rates even if the damage was caused by something outside of your control.

What the experts say

“2025 is poised to be a year of stabilization for car insurance rates. While small rate increases of 2-3% are expected as the market returns to normal, this is a welcome shift after the 50% rise in rates over the last three years. It is a sign of the market regaining balance and the ideal time for American drivers to explore new car insurance options.”

Josh Damico

Vice President of Insurance Operations

How to lower car insurance rates

While there are a lot of determining factors that go into your premium, finding affordable coverage doesn’t have to be impossible. 

One of the best ways to find affordable insurance is to shop around for quotes from different providers. When you shop around, you have the best chance of finding the best coverage option for you at the price you want.

There are several other tried-and-true ways to lower car insurance, like:

• Discover car insurance discounts: Just about every provider has discounts for policyholders. Whether it be for bundling your renters or home insurance with an auto policy, or a good student discount for young drivers, speak with an insurance agent at your current provider to discuss eligibility. 
• Work on your driving habits: When you maintain a clean driving record with no accidents or violations, providers take note of that and will reward you with lower costs.
• Increase your deductible for collision or comprehensive coverage: If you have a full coverage policy, you can also increase your deductible to help lower rates. However, keep in mind that you should only raise it to a reasonable amount that you’re comfortable paying.

MEET OUR EXPERTS

Megan Lee

Megan Lee is an editor, writer, and SEO expert who specializes in insurance, personal finance, travel, and healthcare. She has been published in U.S. News & World Report, USA Today and elsewhere, and has spoken at conferences like that of NAFSA: Association of International Educators. Megan has built and directed remote content teams and editorial strategies for several websites, including NerdWallet. When she`s not crafting her next piece of content, Megan adventures around her Midwest home base where she likes to drink cortados, attend theme parties, ride her bike and cook Asian food.

Everett Cook

Everett Cook is an award-winning journalist and editor with more than 10 years of experience across a variety of industries. In editing for Jerry, Everett’s mission is to help readers have a better understanding of the costs of owning or leasing a car and to better understand their vehicle in terms of insurance and repairs. Prior to joining Jerry, Everett was an editor for Axios. His previous work has been featured in The New York Times, The Los Angeles Times, The San Francisco Chronicle, The Atlantic, Atlantic Re:think, The Boston Globe, USA Today, and others. He’s also been a freelance writer and editor with experience in SEO, audience building, and long-term content roadmaps. Everett is a proud graduate of the University of Michigan.