What Affects Average Car Insurance Costs And Why They Will Rise Even Further In 2023

As per studies conducted by our experts, the average comprehensive car insurance costs for 2022 cars are around $1,834.86 per year. This means that the average auto insurance cost for full coverage has gone up by about $250 to $300 per year. Previously, on an average, drivers across the U.S. spent $1,592 on car insurance for a year.

At an individual level, the cost for insuring a vehicle may further vary depending on a host of factors. And if you have previous accident(s), low credit score, coverage lapse, multiple claims filing or DUI/DWI convictions leading to suspension of driver license, you can expect your car insurance premium to be substantially high.

Why Is There A Substantial Increase In Average Car Insurance Costs By State During 2022?

Auto insurance rates were on the upswing by about 9% in 2022 and they are expected to go up even in 2023. This is primarily because of the following parameters.

1. Increase in number of accidents

The year 2022 witnessed considerable rise in the total number of accidents in every state. Insurers found them expensive to cover due to which they raised premiums substantially. So, even if you have a good driving record, your car insurance rates are likely to go up as well.

2. 2022 saw more severe accidents

According to record available from the U.S. Dept. Of Transport, in the first quarter of 2022, as many as 9,560 drivers died due to car crashes. This is 7% rise over the number of drivers that died in the first quarter of 2021. Consequently, to cover up for the increased costs, companies had to raise auto insurance rates.

3. Steep rise in car parts/labor costs

With substantial increase in the number of accidents during the year 2022, even car parts and components have become expensive to repair or replace post an accident. Add to that increased labor costs which means that the premium is going to be higher.

4. Rise in number of uninsured drivers

For many of you could be still wondering, “whats the average car insurance cost?” and why is it increasing so rapidly. Well, another major reason for this rapid rise in car insurance rates is that there is a big rise in the number of uninsured motorists getting involved in accidents. As a result, insurers have to dish out large amount of money for settling claims.

5. Rise in accidents involving uninsured drivers

As compared to accident rates in 2015, the year 2019 witnessed significantly more number of accidents (over half a million) meeting with accidents involving insured cars.

6. Rise in vehicle robberies, thefts and vandalism

During the years 2019 and 2020, carjacking and converter thefts increased by more than 325% resulting millions of dollars of payouts for insurers in the country. This has lead to steep rise in auto insurance rates.

7. Considerable increase in the prices of new vehicles

The average cost of new cars in 2022 is about $48, 301and this is substantially more than that of the precious year. Market value of vehicle is an important factor in the calculation of insurance rates. Vehicles that are over 10 years old will cost much lesser to insure than new cars.

To learn more about why you can expect the likely trend of higher car insurance rates in 2023, talk to a ProspectsForAgents expert today!

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