How to cope with rising auto insurance rates

Some tips to costs: Shop around, raise your deductible, bundle.

This year, expect to pay more for your car insurance. Even though inflation has been slowing down, car insurance costs have gone up. Since 2023, car insurance rates have surged 26%, and they’ll likely remain elevated until 2025, according to Bankrate’s True Cost of Auto Insurance Report.

The report determined the annual cost for full coverage car insurance in 2024 to be $2,543, compared to $2,014 in 2023 and $1,771 in 2022. For someone earning the median household income of $74,580, that’s 3.41% of their entire income.

Premiums for Georgia drivers are $67 higher than the national average, reaching an average of $2,610 a year, according to Bankrate. The state ranks toward the bottom of the nation in the effective cost of auto insurance — 35th — but its increases are being carried along with the national trend.

Insurers raise costs in response to your risk as a driver, such as where you live and if you have a teen on the policy. They also raise rates based on risks beyond your control, like inflation.

“Car insurance is reactionary, meaning the premium increases we’re seeing in 2024 are a result of insurance companies trying to recoup the losses they experienced over the last few years and accurately assess the risk of future loss,” Bankrate analyst Shannon Martin shares with Kiplinger. “Between 2020 and 2024, inflation increased the cost of vehicle parts and labor, car crash fatalities increased by over 10% and we saw a significant rise in extreme weather and vehicle theft claims. All these factors contribute to the high rates we’re seeing today.”