New data from The Zebra reveals that despite the financial relief measures passed by insurers during the pandemic, auto insurance costs have continued to climb over the years. The report found that the national average annual cost for auto insurance is $1,529, up 3% from last year’s reduced rates. It also noted that despite the rebates provided by insurers during the pandemic, auto rates have increased by 26% since 2011.
Auto insurance rates also vary across regions and states, the report revealed. Louisiana saw the largest average increases in auto insurance rates at 42%, making it the most expensive state for auto insurance. On the flip side, Maryland has seen the most significant decreases to average auto insurance rates, at 9%.
According to The Zebra, the most expensive states for auto insurance (in terms of average annual rates) are:
- Louisiana: $3,265
- Michigan: $2,639
- Florida: $2,425
Meanwhile, the most expensive cities for auto insurance (in terms of average annual rates) are:
- New Orleans, LA: $3,532
- Baton Rouge, LA: $3,473
- Alexandria, LA: $3,202
While the COVID-19 pandemic decreased road activity – with the decrease in the number of miles driven during the first year of the health crisis reported to be as high as 14% by the Federal Highway Administration (FHA) – the number of annual miles driven is only one factor considered in auto insurance pricing, the report said. The Zebra explained that this is why drivers only saw a 4% drop in rates during 2020.
But driving activity is normalizing, as the FHA estimates that there was an 11% increase in miles driven during October 2021. With the return of drivers also came much deadlier road conditions, as risky driving behaviors like distracted and aggressive driving, speeding and impaired driving have spiked, The Zebra stated. Citing data from the National Highway Traffic Safety Administration, the report said that an estimated 20,160 people died in motor vehicle crashes in the first half of 2021, which is an 18.4% from 2020.
Weather was also a factor considered by the report. Although 2021 saw fewer hurricanes than 2020, the year was still considered an above-average hurricane season. It was also noted that winter storms last year caused $15 billion in insured losses, up from only $1 billion in 2020. The Zebra highlighted that much of the damage was caused by just two winter storms that occurred in February.
The Zebra’s findings echo those uncovered by the National Association of Mutual Insurance Companies (NAMIC) in another previous report.
In December, NAMIC published a report which looked into the cost drivers that influence auto insurance rate increases. The report uncovered a lot of notable data on factors that have contributed to higher rates, such as the significant increase in driver numbers, cars becoming more expensive to repair, medical care similarly becoming more expensive over the years, more cases of auto theft and fraud, and more claims for damage caused by extreme weather.