In a recent CarInsurance.com survey, more than half of drivers (57%) said their car insurance rate increased in the past 12 months. In fact, 32% of those drivers said their rates went up by at least 10%, leading many to shop around and buy insurance from another company. About a quarter of respondents left Allstate, 22% left Geico and 21% left Progressive.
Forty-three percent of drivers believed that the increase in car insurance rates was due to inflation. Auto insurance rates, based on the Consumer Price Index, have increased by 14.7% from January 2022 to January 2023, and rates are expected to continue rising. Currently, according to Bankrate, full coverage auto insurance costs an average of $2,014 per year, or $168 per month. In its report for the first quarter of 2023, progressive says they are “re-evaluating our rate plans and intend to be aggressive with rate increases for the remainder of the year.”
Aaron Stevens, a senior professor of finance at Boston University’s Questrom School of Business, told CarInsurance.com that “the cost of an auto insurance policy depends on the expected value of losses.” As parts and labor have increased, it makes sense that the expected value of losses paid for insurance claims would increase in tandem. So as the costs associated with insurance claims rise, so should policy premiums.”
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As rates continue to rise, more people are likely to shop around for the lowest auto insurance rates available. Here’s how much people saved by switching insurers, according to data from CarInsurance.com
| Savings policies | Percentage of customers who saved by switching insurers |
|---|---|
| 5% | 18% |
| 10% | 26% |
| 15% | 29% |
| 20% | 19% |
| others | 8% |
You can use our tool, in partnership with Bankrate, to compare car insurance quotes today.
Stephen Crewdson, senior director of insurance business intelligence at JD Power states in a recent study that “car insurance customers are starting to buy insurance like they buy gas. They’re taking a much more proactive stance in finding plans that fit their needs and budgets, which could have a serious long-term effect on operators who have been working for years to build lifetime value through bundling and other initiatives.”
These are the insurance companies that customers are switching to get better rates.
| company | Percentage of respondents who switched companies |
|---|---|
| Allstate | 31% |
| progressive | 22% |
| Geico | 19% |
| State Farm | 17% |
| USA | 12% |
