Like nearly every purchase consumers make right now, the average cost of car insurance will likely rise for many drivers throughout 2022. Nationally, car insurance rates are rising by an average of 4 .9%, according to approved rate filing data from S&P Global Market Intelligence. These rate changes are expected to affect more than 62.5 million policyholders across the country. For policyholders in some states and with some auto insurers, rate increases could be much larger. Nearly 450,000 Allstate policyholders in Illinois could face a nearly 11% increase, and nearly 500,000 Minnesota policyholders with Progressive could see a 36% increase. They are far from the only companies raising their prices; overall, most drivers will pay more for auto insurance this year.
Auto Insurance Quotes | Compare Car Insurance Quotes Online 2022
How to get free car insurance quotes?
Here are two ways to get auto insurance quotes, which are always free:
1 online. Many auto insurance companies offer free auto insurance quotes online. You can visit several insurance company websites and compare quotes. To save time, use a website that provides quotes from several companies.
2. By telephone or in person. Speak with or visit a local insurance agent who can help you find affordable car insurance options and get you a car insurance quote.
There are generally two types of insurance agents:
1. A "captive" agent works for only one insurance company and can only give you a quote from that insurer
2. An "independent" insurance agent can sell policies from several insurance companies and can get you quotes from different insurers.
Both approaches have advantages and there is no law against contacting multiple insurance agents. It doesn't hurt to get quotes online and speak to an agent who can help you identify your coverage needs and build a policy that's best for you.
What information do I need to get car insurance quotes?
To make the process go as smoothly as possible, it is helpful to have the following information available:
- Driving license. If there are other drivers in your household, you will also need their driver's license information.
- Vehicle Identification Number (VIN). You can usually find your VIN on the driver's side dashboard of the vehicle or printed on a sticker in the driver's side door or door jamb. If you haven't purchased the vehicle yet but know what you're going to buy, ask the seller for the VIN. If you haven't chosen your car yet, you can usually get a quote with a vehicle make and model.
- Mileage. If you own the car, have the odometer reading handy.
- How much coverage you want. You'll want to know what types of coverage you want to buy and how much coverage you need. If you're unsure, it's a good idea to speak to an insurance agent who can help answer your questions.
The auto insurance company will collect additional information about you, such as your driving history, past auto insurance claims, and (in most states) your credit.
Since auto insurance is a mandatory expense for vehicle owners in most states, premium increases can be surprising and financially difficult, especially for drivers who are already paying higher rates than the average due to teenage insurance, having accidents or tickets on their records, or living in an area with a high cost of living. Bankrate explains why rates are likely to rise for many drivers; shows you how to prepare for a possible rate hike; and outlines strategies you can use to help offset those increases.
Are auto insurance rates higher in 2022?
"The overall cost of doing business is increasing for virtually every business in the United States, including insurance companies." And because the "cost of doing business" is part of the premium calculation, consumers can expect, in general, higher premiums in 2022. "
A number of economic and societal influences are driving these potential fare increases, including inflation, supply chain disruptions, and changes in driving habits.
However, keep in mind that rates are highly personalized. Your premium depends on your individual underwriting factors, such as the type of vehicle you drive, your driving and claims history, and the types and levels of cover you choose. Mark Friedlander, director of corporate communications at the Insurance Information Institute (Triple-I), notes that "even if you do not make a claim, an increase in the volume or cost of claims from other drivers may increase rates for auto insurance for all consumers in your city or state." While we expect auto insurance rates to generally increase in 2022, the amount of increase you will see (if any) will depend on your particular situation.
Why are car insurance prices going up?
Auto insurance rates are calculated based on a number of underlying factors. Individually, your age (in all states except Hawaii and Massachusetts), gender (in most states), driving history, vehicle type, and coverage choices affect your premium. Additionally, broader factors also impact rates, such as whether states pass revised insurance laws, the likelihood of claims occurring in certain areas, or if vehicle repair costs increase.
Inflation
Perhaps the main driver of rising auto insurance premiums in 2022 will be the same thing driving up costs across the board: inflation. The Consumer Price Index (CPI) increased by 8.6% between May 2021 and May 2022. This means that, on average, we are spending 8.6% more than a year ago on the same goods and services. While auto insurance is certainly not the most drastic increase—fuel, energy products, and air fares take the top spots—the increase still has the potential to further strain consumers' wallets.
Inflation has hit the new and used vehicle markets in 2021, and while these numbers have started to level off, they are nowhere near the level they were before our current inflationary situation. The price of new cars and trucks increased by 12.6% between May 2021 and May 2022, while the market for used cars and trucks saw an increase of 16.1%. Vehicles are also much more complex than before, increasing the overall cost of ownership. Even small accidents can cause hundreds or thousands of dollars in damage to delicate electronics that require specialized repairs.
Vehicle costs aren't the only thing affected by inflation. The cost of health care is also rising. The Centers for Medicare & Medicaid Services reports that healthcare spending rose 9.7% in 2020, the most recent year for which data is available. This means that when someone is injured in a car accident, the resulting medical costs are higher than they were in previous years.
Because auto insurance is designed to pay for costs after an accident — including property damage and medical expenses — anything that increases those costs is likely to increase rates. Insurers need to make sure they have enough funds to pay claims, so when inflation hits, car insurance rates are affected.
You may be tempted to reduce your coverage to save money, but insurance professionals advise against this strategy. Auto insurance is designed to protect your finances following an accident, and reducing your coverage could result in higher costs. In an inflationary economy where almost everything costs more, having good car insurance could help you keep more of your hard-earned money if you file a claim.
Supply chain disruptions
The past few years have created a perfect storm to disrupt supply chains. COVID-19 shutdowns have led to lower demand in some industries in 2020. With fewer people on the road and cars generally being used less, there has been a reduced need for vehicle parts. Then an ice storm in February 2021 destroyed factories and factories all over the South. The Suez Canal was blocked for six days in March 2021, and people started to return to a more normal level of driving. This resulted in an increase in demand but a decrease in supply. The automotive industry has been one of the hardest hit sectors. "Parts are more expensive, labour is more expensive, and repair costs are more expensive overall," Ellis says.
The difficulty of obtaining semiconductors is perhaps the most obvious of these vehicle-related supply chain disruptions. Semiconductors, often referred to as "chips", are used in a wide range of automotive applications, including driver assistance systems, entertainment systems, and electronic mechanisms. In December 2021, more than 50 business leaders – including executives from American Honda Company, Ford Motor Company, General Motors, and Toyota Motor North America – sent a letter to Congress urging governing bodies to encourage the United States to create its own semiconductor research, design, and development methods to increase the supply of semiconductors and the jobs available.
Labor shortages
In addition to supply chain issues making parts harder to find, labour shortages have also made skilled workers harder to find. The Bureau of Labor Statistics reports that unemployment was 3.6% in April 2022, almost back to the pre-pandemic level of 3.5%. However, many companies are still struggling to find workers. The "big quit" has caused workers to reconsider their career paths, with many labour shortages caused not by unemployment but by workers changing jobs.
Fewer workers may contribute to higher insurance costs. When fewer people are doing a given job, including vehicle repair and health care work, pay rates often increase as an incentive. For example, a mechanic may have repaired bumpers for $100.To compensate for a reduced workforce, that same mechanic is now working longer days and taking less time off.To compensate, the mechanic is now charging $300 to cover the same repair. Since repair costs more, insurance companies may raise rates to prepare for higher claim expenses.
Changing driving habits
As we prepared for the COVID-19 pandemic in early 2020, the country saw an unprecedented drop in driving levels.Many households have stopped commuting to work, school, and activities. The streets were quieter and there were fewer accidents. As a result, many insurance companies have refunded certain premiums to policyholders.
However, Friedlander points out that
"In 2021, we saw a return to pre-pandemic driving habits, which led to a significant increase in auto insurance claims and accident severity. In fact, the National Highway Traffic Safety Administration reported an 18.4% increase in fatalities in the first six months of 2021 compared to the first six months of 2020—the largest percentage increase ever.
This pendulum swing in driving habits may mean insurance companies need to replenish their claims reserves—money set aside and earmarked to pay for losses—which could mean higher premiums.
Are all car insurance contracts affected?
The premium increases you see on your own policy will depend on a number of factors, including the state you live in, your driving history, and the type of vehicle you own. Not all companies raise rates in all states. According to S&P data, USAA is cutting rates by about 1% on average for just over 100,000 policyholders in Massachusetts, and about 47,000 policyholders in Tennessee with Nationwide could see a 0.4% drop.However, one of the most important factors when considering rate increases is your level of coverage.
Rate increases can impact your policy across types and levels of cover, but each factor has a different impact on your premium. For example, factors that increase vehicle costs, such as inflation and supply chain issues, are likely to increase the cost of your property damage liability and collision coverage because these types of coverage deal with payment for damage to vehicles. However, rising medical costs could affect the cost of your bodily injury liability coverage and medical payments or Personal Injury Protection (PIP) coverage. Each part of an auto insurance policy is priced separately and is therefore affected by different impacts from rate increases.
Minimum coverage policies include only the types and levels of coverage required by your state. Because these coverage limits offer very little financial protection, they generally cost less than a policy with higher limits or full coverage. This means that rate increases may not seem as drastic on minimum coverage policies compared to policyholders with full coverage policies or higher limits.
Is it possible to avoid the increase in insurance costs?
Preparing for a rate increase can seem stressful, but knowing your auto premium could go up can help you prepare and act quickly.
Review your current policy: The first step in preparing for a premium change is to understand your current insurance policy. Reviewing your policy and knowing your coverage types, limits, discounts, and premiums can help you learn more about your policy. If you are unsure how to analyse your policy, you may want to speak to an agent. Be on the lookout for your policy's effective dates and see if your next renewal is available. If so, check the premium for that policy to see how your rate will be affected in 2022.
Shop around for a new job: Friedlander says, "Comparison shopping is key to getting the best cost for the amount of coverage that fits your needs." If you get your policy renewed and find that your premium has gone up, you may want to contact your auto insurance company first to see if you might be able to adjust your policy or add additional features. additional discounts at lower rates. For example, if you are still driving less in 2022 than in previous years, could you qualify for an annual mileage discount? If you can't make up for your increased premium, you may want to shop around. While most auto insurance companies sell the same types of coverage, each company also has its own underwriting rules, discounts, pricing algorithm, and policy features. Getting quotes from a few carriers can help you find a lower rate and a policy that meets your needs. You can even get an early buyer discount if you switch before your next renewal.
Take advantage of discounts: Discounts can be one of the easiest ways to lower your premium. Reviewing your current discounts can help you identify areas where you could save. If you are shopping for new coverage, you can look for a company that offers several discounts that may be available to you.
Check your other policies: Don't forget about other insurance policies you may have. Bundling your main policies, such as home and auto, with one insurer could potentially help you save money on both. Even if you can't make up for the increase in your auto insurance, you may still be able to save money on your home insurance or renter's insurance policy. Reviewing your entire insurance portfolio is a good way to make sure you're properly insured but aren't paying too much for coverage.
Will car insurance prices go down?
They could. Car insurance rates rarely, if ever, stay the same from year to year. Although we expect rates to rise at a general level in 2022, premiums could fall further in the future as inflation returns to lower levels and supply chain issues are resolved.
Your individual premium is based on your personal rating factors, so the extent to which you are affected by 2022 rate increases will vary. For example, you may see rates decline as overall average rates increase. Your geographic location may have seen a reduction in car accidents over the past year, resulting in fewer claims; or maybe an at-fault accident or ticket you've had in the past is old enough to no longer overload your policy, resulting in a premium reduction. Talking to an agent or company representative about your unique insurance situation is probably the best way to understand your policy price.
If your rate goes up significantly, insurance experts and financial advisers agree that the best thing to do is to keep your car insurance policy in force. You may be able to work with an agent to develop a strategy to lower your premium to a more acceptable level, but cancelling your policy outright could expose you to significant costs in the event of an accident. Staying aware of your coverage needs and understanding your policy can help ensure you have the financial protection to suit your lifestyle and budget.
How do you get free car insurance quotes?
Here are two ways to get auto insurance quotes, which are always free:
1. Online Many auto insurance companies offer free auto insurance quotes online. You can visit several insurance company websites and compare quotes. To save time, use a website that provides quotes from several companies.
2. Over the phone or in personSpeak with or visit a local insurance agent who can help you find affordable car insurance options and get you a car insurance quote.
There are generally two types of insurance agents:
1. A "captive" agent works for only one insurance company and can give you a quote from that insurer.
2. An "independent" insurance agent can sell policies from several insurance companies and can get you quotes from different insurers.
Both approaches have advantages, and there is no law against contacting multiple insurance agents. It doesn't hurt to get quotes online and speak to an agent who can help you identify your coverage needs and build a policy that's best for you.
What information do I need to get car insurance quotes?
For the process to go as smoothly as possible, it is useful to have the following information available:
driving license If there are other drivers in your household, you will also need their driver's licence information.
VIN stands for Vehicle Identification Number.You can usually find your VIN on the driver's side dashboard of the vehicle or printed on a sticker on the driver's side door or door jamb. If you haven't purchased the vehicle yet but know what you're going to buy, ask the seller for the VIN. If you haven't chosen your car yet, you can usually get a quote with a vehicle make and model.
mileage. If you own the car, have the odometer reading handy.
How much coverage do you want? You'll want to know what types of coverage you want to buy and how much coverage you need. If you're unsure, it's a good idea to speak with an insurance agent who can help answer your questions.
The auto insurance company will collect additional information about you, such as your driving history, past auto insurance claims, and (in most states), your credit.
What is the cheapest car insurance?
Our analysis of the best cheap car insurance nationwide found that, on average, USAA has the cheapest car insurance quotes. But USAA auto insurance is only available to active military members, veterans, and their families.
If you don't qualify for a policy through USAA, our analysis found that Erie, Geico, and State Farm offer competitive rates, based on national averages. It's always a good idea to get quotes from multiple companies, as the cheapest car insurance companies can vary depending on your state, driving record, etc.
Compare car insurance rates in 2022.
Comparing car insurance quotes is all about putting options together so you can find the best car insurance companies.
Compare auto insurance rates.
- By company
- By state
- By age and sex.
- According to credit score
- For drivers with a DUI,
- For drivers, having an at-fault accident
- For drivers with a speeding ticket:
- For seniors
- To add a teen driver to
Compare auto insurance rates by state.
Source: Quadrant Information Services; Average annual rates for a good 30-year-old driver with $100,000 bodily injury liability per person, $300,000 per accident, $100,000 property damage liability, uninsured motorist coverage, and any other state-mandated coverage. The rate also includes collision and all perils with a deductible of $500.
Compare auto insurance rates by age and gender 2022
Your age and gender affect car insurance rates. Young, inexperienced drivers pay the most and can expect their rates to start dropping at age 25. Drivers with a good driving history will enjoy their best rates in their 50s and 60s. Rates begin to rise again around age 65.
Most drivers don't like the idea of car insurance companies using gender in car insurance quotes, according to a Forbes Advisor survey. The majority of drivers (62%) think gender shouldn't be a factor in car insurance costs. Almost three-quarters of women (72%) do not support him, compared to 41% of men.
In your opinion, should car insurance companies consider the gender of the driver when it comes to pricing?
