Car Insurance Rate Increases Will Slow to 5% in 2025, Report Predicts | Insurify

Florida and New York are also among the top 10 states with the most expensive auto insurance costs.

Inflation, growing climate risk, and expensive repair costs for high-tech and electric vehicles (EVs) continue to drive the increases.

Where drivers pay the most

Though average premiums decreased in 21 states in the second half of 2024, other states saw sharp increases.

Minnesota saw full-coverage rates increase by 58%, driving the state average premium to $2,524, which is above the national average. Full-coverage rates in Maryland, the most expensive state for car insurance, increased by 53% in 2024, pushing the state’s average annual premium to $4,060.

Numerous factors can drive up car insurance rates. In Maryland, car thefts rose by 63% in 2023, according to the National Insurance Crime Bureau (NICB). A high rate of vehicle theft can lead to costly comprehensive insurance claims and high insurer losses. Washington, D.C., the third most expensive location for car insurance, saw its already-high car theft rate spike further in 2023, according to the NICB.

New York has historically high auto insurance rates because New York City’s population density and congested streets mean higher accident and fatality rates. State legislative changes in New York and Maryland are also affecting rates.

In July, Maryland began requiring insurers to provide enhanced underinsured motorist coverage.

In New York, a 2023 law requiring insurers to provide supplemental spousal liability coverage added to insurers’ financial responsibility. But a new consumer relief policy in 2024 could reduce the number of uninsured drivers in New York, which could lower rates statewide.

What 2025 will bring

Car insurance rates have soared 42% since 2022 and 15% in 2024 alone, but Insurify projects a much lower increase of 5% this year. Record underwriting losses in 2022 led full-coverage insurance policies to rise 24% in 2023. But rate increases have slowed down as the insurance industry recovers.

Rates will decrease in a few states in 2025, according to the report. Hawaii, New Hampshire, and Vermont will all see rates drop this year.

But Florida and New York, which already have some of the highest rates in the country, will see rates increase by 10% in 2025. Georgia and Nevada rates will increase by 8% and Delaware rates will climb by 7%.

To put that into perspective, Insurify projects the national average full-coverage rate will be $2,435 by the end of 2025. However, average rates will climb to $3,484 in Florida and $4,183 in New York.

What’s next? Finding new ways to save

Though rising auto insurance rates are adding to the cost of living, drivers have multiple strategies available to reduce their car insurance costs.

The Insurance Information Institute recommends drivers shop around and get at least three quotes from different car insurance companies before deciding on a policy. Doing some research to understand what kind of insurance is the right fit will also help prevent drivers from buying too much or too little coverage.

Maintaining a safe driving record and good credit history are longer-term strategies but can significantly reduce auto premiums. Discounts, for everything from installing safety features to bundling policies, can also lead to significant savings.

Insurify’s car insurance data is available for download from its Auto Insurance Data Center. Members of the media looking for additional data or insights should email press@insurify.com.

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