Similar to various industries, the auto insurance sector has been affected by the upward trend in inflation, influencing consumers’ financial plans. According to data from ValuePenguin in 2024, the average annual expense for full coverage car insurance is $1,984. While numerous states are seeing notable percentage hikes above the national average, others, such as North Carolina, are observing declines in percentage relative to the national average.
You might be curious about the underlying reasons behind these increases beyond economic inflation rates and how they will impact your future.
Costly Car Repairs & Insurance Claims
Severe Weather Damage
While we all enjoy the weather and coastal lifestyle of North Carolina, it comes with a downside of severe weather from storms and hurricanes. In 2023 the top contributors to vehicle damage claims were hail and flooding caused by these storms, affecting hundreds of thousands of cars in a single area. With the increased risk and unpredictable extreme weather occurring yearly, insurance companies are forced to increase their rates.
Increase in Electric Vehicles
As gas prices rise and the used car market stabilizes, consumer interest in electric vehicles has surged. While electric vehicles offer numerous benefits, such as environmental friendliness, they also come with drawbacks. Specifically, in 2024, insuring an electric vehicle costs an average of 23% more than insuring a gas-powered vehicle.
You might wonder why insuring electric vehicles comes at a higher cost. We’ve got the answer! Electric vehicles entail pricier repairs and replacements, primarily due to battery expenses and other high-cost components. Additionally, there’s a shortage of repair shops qualified to handle electric vehicles compared to traditional ones. Consequently, those with the expertise may charge more due to specialized training and demand.
Car Thefts
Over the last two years, car thefts have surged, particularly targeting vulnerable Kia and Hyundai models, which are easily stolen. These brands account for over half of car thefts in many areas, elevating the risk of insuring them and consequently raising monthly costs.
Additionally, catalytic converters have become prime targets for theft due to their high value and vulnerability. Made of precious metals like platinum, palladium, and rhodium, their worth escalated during the pandemic due to supply chain disruptions.
How to Save Money On Auto Insurance in 2024
With over 30 years of expertise in sourcing the most affordable car insurance rates in Raleigh North Carolina and Virginia, we stand as your premier agents of choice. Regardless of your driving record or desire to maximize savings, we’re dedicated to assisting you every step of the way. Contact us today to get started.