Insurify Projects Car Insurance Costs Will Increase Another 5% in 2025, After Soaring 42% Since 2022

Car insurance rates increased by 15% in 2024, adding to the rising cost of car ownership and further straining drivers’ budgets. American drivers now pay an average of $2,313 annually for full coverage, but rates in six states exceed $3,000 annually, Insurify data shows.

Rising vehicle repair costs, linked to high-tech and electric vehicles (EVs), fueled rate hikes in 2024. Auto insurance companies are also increasingly factoring climate risk into their rates as insurers can incur significant losses from severe weather events.

The cost of full-coverage policies surged by 24% in 2023 in response to record underwriting losses of $33.1 billion in 2022. As the industry has recovered, rate increases have slowed. Average premiums decreased in 21 states in the second half of the year, according to Insurify data.

Insurify’s data science team analyzed car insurance rates across the U.S. to determine where full-coverage premiums are rising fastest, which factors drove rate hikes, and what drivers can expect in 2025.

Key Takeaways

• After a sharp rise of 15% last year, full-coverage rate increases will slow to 5% in 2025, Insurify projects. By the end of the year, the average annual cost of full coverage will rise to $2,435.

• Car insurance costs increased fastest in Minnesota, Maryland, California, Virginia, and Pennsylvania, with average rate hikes of 33% to 58% in 2024. Maryland drivers now pay the most for car insurance, with an average annual full-coverage premium of $4,060.

• Full-coverage rates will rise by up to 10% in Florida, New York, Georgia, Nevada, and Delaware in 2025, according to Insurify projections. In the five states where rates are rising fastest, drivers already pay more than the national average ($2,313) for full coverage.

• EV insurance costs for nine popular models rose by 28% in 2024, twice as fast as comparable gas-powered models, according to Insurify data.

• EVs are now 23% more expensive to insure than comparable gas models, with an average annual full-coverage cost of $3,430.

Annual car insurance costs hit $2,313 in 2024, but drivers in many states see higher-than-average rate hikes

Car insurance rates rose by an average of 15% in 2024, but hikes slowed in the second half of the year, according to Insurify data. Rates continued to increase in 24 states and Washington, D.C., but remained stagnant or fell in the remaining states in the last half of the year.

Slowing rate hikes will bring welcome financial relief for American drivers, who saw full-coverage premiums increase by an average of 42% (from $1,633 to $2,313) between 2022 and 2024.

Drivers in some states have felt the burden of rising insurance costs more than others. Insurify used proprietary car insurance data from across the U.S. to determine the average cost in each state. The data science team analyzed historic rate increases and insurer loss ratios to project 2025 end-of-year rates by state.

Maryland, New York lead the 10 most expensive states for car insurance

Car insurance rates vary widely across the U.S., with New Hampshire drivers paying an average of $997 annually for full coverage and Maryland drivers paying more than $4,000. Legislative changes, surges in vehicle thefts, rising accident rates, and climate risks influenced the high cost of car insurance in these states.

1. Maryland

• Average annual cost of full coverage: $4,060

• Average premium change in 2024: 53%

• Projected annual cost of full coverage by the end of 2025: $4,255

Maryland drivers now have the highest car insurance costs in the U.S., with an average annual full-coverage premium of $4,060. Insurance costs in the state skyrocketed by 53% in 2024. A surge in stolen vehicle claims may have driven some rate increases. Maryland car thefts rose by 63% in 2023, according to the National Insurance Crime Bureau (NICB).

State legislative changes are also fueling rate hikes. Maryland began requiring auto insurers to provide enhanced underinsured motorist coverage (EUIM) on July 1, 2024. Insurers must also pay diminished value claims (or the difference between a car’s value before and after an accident), increasing insurers’ financial responsibility, which they now have to account for when setting rates.

2. New York

• Average annual cost of full coverage: $3,804

• Average premium change in 2024: 14%

• Projected annual cost of full coverage by the end of 2025: $4,183

New York has historically had higher-than-average car insurance rates because its high population density increases the risk of accidents and losses for insurers. New York enacted a policy requiring car insurance companies to provide supplemental spousal liability coverage for all policies on Aug. 1, 2023, adding to insurers’ financial responsibility.

The 2024 Auto Insurance Consumer Relief Act waives a prior vehicle photo-inspection requirement. Previously, insurers had to suspend coverage for policyholders who didn’t meet the 14-day inspection timeline. The new policy could reduce New York’s share of uninsured motorists, which could reduce rates in the state, as a high rate of uninsured drivers can put upward pressure on premiums.

3. Washington, D.C.

• Average annual cost of full coverage: $3,399

• Average premium change in 2024: 24%

• Projected annual cost of full coverage by the end of 2025: N/A

Full coverage rates in Washington, D.C., rose by 24% in 2024, bringing the average annual cost to $3,399. Washington, D.C.’s vehicle theft rate is three times higher than the national average, and thefts increased by 64% in 2023, according to NICB data. Insurers factor in this higher claim risk when setting rates.

Hectic traffic patterns also contribute to the district’s high insurance costs. D.C. has the highest population density in the nation, according to the U.S. Census Bureau, increasing the odds of an accident. Traffic fatalities in the district increased by 41% between 2022 and 2023, according to National Highway Traffic Safety Administration (NHTSA) data.

4. South Carolina

• Average annual cost of full coverage: $3,393

• Average premium change in 2024: 29%

• Projected annual cost of full coverage by the end of 2025: $3,603

South Carolina full-coverage premiums increased by 29% to an annual average of $3,393. Drivers in the state pay 46% more than the U.S. average of $2,313. South Carolina has the highest number of traffic fatalities per vehicle mile traveled, at 1.85 per 100 million miles, compared to the U.S. average of 1.33 deaths. The state’s fatal accident rate factors into insurance costs.

Insurance companies increasingly consider climate risk in their rate setting as destructive weather events become more frequent and severe. South Carolina’s high hurricane and tropical storm risk — and resulting vehicle damage, covered by comprehensive car insurance — could cause major losses for insurers, so they set rates accordingly.

5. Florida

• Average annual cost of full coverage: $3,166

• Average premium change in 2024: 9%

• Projected annual cost of full coverage by the end of 2025: $3,484

Florida drivers pay an average of $3,166 annually for full coverage, or 35% more than the national average. Record-breaking financial losses in 2022 sent Florida’s struggling insurance market into a tailspin. The Florida insurance crisis is primarily affecting home insurance, but losses are pushing some car insurance companies to lower their exposure in the state.

The state also has a no-fault insurance system, meaning insurers pay personal injury protection (PIP) claims regardless of who’s at fault for an accident.

Insurance fraud is common in no-fault systems, which raises claims costs for insurers that increase rates to cover losses. Auto glass fraud in Florida increased by nearly 4,000% between 2011 and 2021, prompting legislators to pass a bill to address it in 2023.

6. Delaware

• Average annual cost of full coverage: $3,078

• Average premium change in 2024: 8%

• Projected annual cost of full coverage by the end of 2025: $3,308

The cost of full coverage in Delaware is 33% higher than the national average, at an annual rate of $3,078. High population density increases the chance of a car accident in Delaware, and insurers factor this risk into their rates.

Delaware doesn’t cap pain and suffering damages, which means insurer payouts in the state may be higher for severe or fatal accidents. Insurers also consider these losses when setting rates.

7. Nevada

• Average annual cost of full coverage: $2,973

• Average premium change in 2024: 1%

• Projected annual cost of full coverage by the end of 2025: $3,214

Nevada residents pay an annual average of $2,973 for full coverage, or 29% more than the national average. On average, Nevada drivers with full coverage saw a modest premium increase of 1% in 2024, but Insurify projects rates will rise by 8% in 2025, bringing the average annual cost to more than $3,200.

Car theft in Nevada surged by 18% in 2023, according to the NICB. Nevada has the third-most vehicle thefts per capita. Insurers consider vehicle theft risk when determining insurance rates, pushing up full-coverage costs in the state.

8. Louisiana

• Average annual cost of full coverage: $2,820

• Average premium change in 2024: 1%

• Projected annual cost of full coverage by the end of 2025: $2,944

Louisiana drivers pay 22% more than the U.S. average for full-coverage car insurance, with an average annual cost of $2,820. But Louisiana’s median household income of $58,229 is 28% lower than the national average of $80,610, according to U.S. Census Bureau data, increasing the burden of rising insurance costs.

Louisiana is grappling with a growing insurance crisis fueled by the state’s severe weather risks. The crisis has mostly affected home insurance, but climate risk also affects car insurance losses and premiums.

Louisiana’s legislature passed multiple insurer-friendly reforms in recent years aimed at lowering rates by reducing excessive medical billing and imposing time limits on property damage claims. Those policies may be effective, as rates have fallen by 12% since mid-2024, and Insurify projects Louisiana insurance costs will rise by 4% in 2025, compared to 5% nationwide.

9. Colorado (Tied)

• Average annual cost of full coverage: $2,815

• Average premium change in 2024: 26%

• Projected annual cost of full coverage by the end of 2025: $2,878

The cost of full coverage in Colorado increased by 26% in 2024, pushing the average annual rate to $2,815. Insurify projects rate hikes will slow to 2% in 2025 as insurers in the state remain more profitable than average.

Still, Colorado is the second most vulnerable state to hail damage, and insurers factor potential damage into their rates. Hail claims cost nearly 22% more than the average comprehensive claim, and hail damage repair costs have increased by 15% in the past three years, according to CCC Intelligent Solutions.

10. Georgia (Tied)

• Average annual cost of full coverage: $2,815

• Average premium change in 2024: 21%

• Projected annual cost of full coverage by the end of 2025: $3,052

Georgia’s full-coverage costs are 22% higher than the national average, at $2,815 annually. Average rates in Georgia increased by 21% in 2024, but rate hikes slowed in the second half of the year, according to Insurify data.

On July 1, 2023, Georgia ended its file-and-use provision that allowed insurers to implement rates immediately after filing. The new legislation gives Georgia’s insurance commissioner 60 days to review rate filings, which helps curb exorbitant rate hikes.

Average full-coverage costs rose 48% to 58% in California, Maryland, and Minnesota

Three states from different regions experienced rapid rate hikes of 48%–58% in 2024. The reasons behind the increases vary, from insurance requirement changes to severe weather.

Minnesota saw the fastest increase, at 58%, bringing average annual full-coverage costs to $2,524. The state experienced several waves of severe storms, producing heavy rainfall and record-breaking 6-inch hailstones, according to the Minnesota Department of Natural Resources. Extreme hail raises risk for auto insurers, contributing to rate increases.

Maryland, the most expensive state for car insurance in the U.S., saw a 53% increase in full-coverage costs. With an average annual full-coverage premium of $4,060, Maryland drivers pay 76% more than the national average for car insurance.

An unusually severe hailstorm hit Maryland in August, producing golf- and tennis-ball-sized hail that broke numerous windshields. As hailstorms increase in severity and frequency, insurers adjust pricing models to reflect the increased risk. Maryland also started requiring EUIM coverage in July 2024, increasing insurer responsibility and putting direct upward pressure on rates.

Likewise, a combination of climate risk and legislation changes factored into the 48% average rate increase that California drivers experienced in 2024. Full coverage in California now costs an average of $2,575 annually, or 11% more than the U.S. average.

California more than doubled its mandatory liability limits on Jan. 1, 2024, increasing auto insurers’ financial responsibility significantly. The change offers more protection to drivers after an accident but pushes up premiums.

Destructive hailstorms are uncommon in California, but wildfires pose a major risk. In January 2025, thousands of homes and vehicles burned in Southern California as wildfires tore through the Los Angeles area. Comprehensive car insurance, part of a full-coverage policy, covers fire damage — and destructive wildfires in densely populated areas cause significant losses for auto insurers.

Compounding these factors, California’s Department of Insurance (CDI) froze rates for two years during the COVID-19 pandemic, making it difficult for insurers to operate profitably in a state with already complex regulations around insurance rate increases. Some insurers, unable to operate profitably, left the state. Once the CDI lifted those restrictions, insurers rapidly raised rates to catch up with the rising cost of vehicle maintenance and repairs.

California, Maryland, and Minnesota drivers will get some relief from rate hikes in 2025 as the auto insurance industry recovers. Insurify projects rates will rise 6% in California and 5% in Maryland and Minnesota in 2025. But drivers in other states will see more significant increases this year.

States where car insurance will rise the fastest in 2025

Auto insurance rate increases in 2025 will likely be less dramatic than the two prior years. Insurify’s data science team projects the cost of full coverage will rise by 5% nationwide this year. Florida and New York drivers, however, could see a 10% increase. Insurify projects premiums will rise between 7% and 8% in Georgia, Nevada, and Delaware.

The reasons for the anticipated rate increases differ by state.

Climate risks and insurance fraud have made it difficult for insurers to stay solvent in Florida, leading to steeper rate hikes throughout 2025. New York insurers are grappling with profitability, too. Like Florida, New York is a no-fault state, which increases vulnerability to staged accidents, exaggerated medical costs, and other insurance fraud.

Densely populated cities like Las Vegas and Reno drive up Nevada’s car insurance rates since accident risks rise with traffic congestion. The state also has the fifth-highest number of drunk drivers, according to an Insurify analysis of DUI arrest data.

Georgia and Delaware face damage from hurricanes and coastal storms, but the states’ uninsured motorist rates affect rate hikes more significantly. In both states, 18.1% of drivers are uninsured, compared to 14% nationally. Insurers consider this added risk when setting rates.

These varied factors increase insurer losses in all five states, leading to higher insurance premiums. Car insurance companies in Florida and New York had the highest and second-highest losses in 2023, followed by Georgia, Nevada, and Delaware.

Florida, New York, Georgia, Nevada, and Delaware have the fastest-rising full-coverage rates, but drivers with liability-only insurance (the minimum required coverage) could see significant hikes in some states too, says Betsy Stella, vice president of carrier management at Insurify.

California, Utah, Virginia, and North Carolina recently increased minimum coverage limits, which could drive up liability-only insurance premiums and full-coverage costs in those states in 2025.

High-tech cars drive a 3.7% increase in repair costs, contributing to higher premiums

Motor vehicle maintenance and repair costs surged by 5.7% in 2024, according to the U.S. Bureau of Labor Statistics Consumer Price Index. Cars with advanced driver-assistance systems (ADAS) contribute to rising repair costs, according to AAA, which found high-tech vehicles can cost twice as much to repair following a collision.

The average post-accident repair cost, as of the third quarter of 2024, is $4,667 — a 3.7% year-over-year increase — according to CCC’s Q4 2024 Crash Course report. Insurers build rising repair costs into their rates, resulting in higher premiums.

Electric vehicle repair and replacement costs fuel rising rates

EV insurance rates increased by 28% in 2024, twice as fast as rates for gas-powered internal combustion engine (ICE) vehicles. The average full-coverage premium for EVs is 23% higher than for ICEs, averaging $3,430 annually versus $2,778, according to Insurify data for nine popular EV models and comparable ICEs.

Electric vehicle (EV) sales surged by 11% year over year, comprising about 9% of car sales in the third quarter of 2024. As more U.S. drivers switch to EVs from ICE vehicles, they’ll likely see an increase in their insurance costs.

High repair costs factor into EV insurance premiums. The average post-accident repair for EVs costs $6,066 — nearly 30% more than the $4,703 repair cost for traditional vehicles, according to Kelley Blue Book (KBB).

With an average MSRP of $55,105, EVs are also 13% more expensive than ICEs, which average $48,724, according to KBB. The higher purchase cost factors into insurance premiums since insurers need to pay out more on average for a totaled EV than an ICE.

The Tesla Model 3 was the most expensive EV to insure among the nine models Insurify analyzed. The Model 3’s average annual full-coverage premium of $4,362 is 25% higher than the comparable Mercedes Benz A-Class.

Auto insurers face a growing threat from climate catastrophes

Climate change has historically affected home insurance premiums more than car insurance. But auto insurers are increasingly considering climate damage in their risk modeling as rising temperatures fuel more severe and frequent weather events.

In September and October 2024, Hurricanes Helene and Milton caused nearly $50 billion in insured losses, according to Swiss Re. Approximately 138,000 flooded vehicles were among the Helene losses, CARFAX estimates.

In 2024, severe convective storms (SCS), or severe thunderstorms that produce heavy rainfall, strong winds, hail, or tornadoes, caused more than $50 billion in U.S. insured losses for a second consecutive year. Insured losses from SCS never reached $45 billion before 2023, according to an Aon report.

Hail claims are also increasing, comprising 11.8% of comprehensive claims in 2023, compared to 9% in 2020, according to CCC Intelligent Solutions.

Climate change affects liability-only insurance premiums less since the coverage doesn’t pay for damage from flooding, hailstorms, tornadoes, falling branches, or wildfires. Comprehensive car insurance covers these perils, and as a result, an area’s level of climate-risk exposure factors into rates.

Despite growing losses from severe weather events, climate catastrophes aren’t the most pressing risk for auto insurers, says Stella.

“Although these large events certainly have an impact on auto insurers’ underwriting results, they’re generally not as impactful as they are to home insurers.”

Rising auto maintenance and repair costs, including costly repairs for increasingly high-tech vehicles, more significantly affect car insurance rates.

Insurers return to profitability, easing car insurance rate hikes in most states

After several years of volatility marked by skyrocketing premiums, the auto insurance industry shows signs of recovery. Insurance companies experienced record losses in 2022, then dropped high-risk policies and rapidly raised rates in 2023 to maintain sufficient capital. Insurers had a better 2024 as auto losses fell and premium earnings increased, which could be good news for drivers in 2025.

“The return to profitability will mean more stability in the market. As long as profitable trends hold, we can expect insurers to be looking for growth and taking a more moderate approach toward rate changes,” said Stella.

In high-risk states like Florida and New York, that relief might not come in 2025. Insurance companies in some states are still trying to align rates with risk, Stella said.

“As regulators have been slow to approve rate changes, New York stands out in terms of the [slower] pace that it’s moved toward profitability. Insurers still have limited capacity in that state.”

Though rate increases will slow in 2025, many drivers struggle to afford their current premiums. Telematics programs, which track driving behavior, can significantly lower costs for responsible drivers. Stella expects telematics to grow in 2025 as more policyholders seek discounts.

“Insurance companies have long been interested in using actual driving behaviors to assess risk. It’s an idea that drivers have been averse to until now … Insurers are leaning into the opportunity,” said Stella.

As insurers return to financial stability, drivers may also find it easier to lower their premiums by comparing rates from multiple insurance companies.

Methodology

Insurify’s data scientists examined more than 97 million rates in its proprietary database, quoted via integrations with partnering insurance companies. Driver applications originate from all 50 states and Washington, D.C., and include information on the exact coverage specifications of each driver’s quoted policies. Insurify excluded Alaska data due to lower quoting volume.

The premiums in this report reflect the median insurance cost for drivers between the ages of 20 and 70 with clean driving records and average or better credit, unless otherwise noted. Yearly prices in this report are two-year rolling medians to manage extreme market volatility over the past few years.

Liability-only premiums correspond to policies with bodily injury limits between state-minimum requirements and $50,000 per person, $100,000 per accident; property damage coverage between $10,000 and $50,000; and no additional coverage. Full-coverage premiums reflect the same bodily injury and property damage limits, plus comprehensive and collision coverage with deductibles of $1,000. 

To project how much the average driver will pay for full-coverage insurance by the end of 2025, Insurify data scientists analyzed insurance loss-ratios by state in 2024. They then used this information to project rate change magnitude in every state through the end of the year. D.C. was excluded from the projections due to a lack of loss-ratio. 

To download more auto insurance data, visit Insurify’s data center.