Why Did Your Car Insurance Rates Go Up? (2025)

Numerous factors affect your car insurance rates, from your age and driving record to regional climate risk. Some may increase your premium, like adding a teen driver to your policy. Others may come as a surprise, like a rate increase on renewal because car theft rates rose in your neighborhood.

Understanding when and why your auto insurance rates might increase can empower you to plan for changes and shop around for the coverage you need. Here’s what to know about why your car insurance rates might have gone up and why they’re increasing across the nation.

Reasons why your car insurance rate increased

Several individual and local factors, like your driving record and your area’s claims rates, can increase your car insurance premium. Even before accounting for more regional or national factors, like severe storms or inflation, causing a fender bender or adding a driver to your policy can affect your rates.

Here are some common factors that can affect your premiums.

Received a speeding ticket or moving violation

Speeding, running a red light or stop sign, texting while driving, failing to signal, drunk driving, weaving, and tailgating are all moving violations. These are dangerous driving behaviors, and they often come with higher fines, stiffer penalties, and more significant insurance rate increases. Non-moving violations — like an expired registration or a parking ticket — generally don’t affect your premiums.

Got into an accident

If you cause an accident, your insurance rates will almost always increase. In some states, an at-fault incident may not affect your rates if the damage isn’t too costly. The rate increase will typically remain for three years, but this varies by state and insurer.1

Unfortunately, sometimes even car accidents you didn’t cause can raise your rates, though often not by as much as an at-fault accident. An increase can depend on your state and insurance company. For example, some states have no-fault car insurance laws, which means each driver involved in a crash files a claim to their insurer for injuries. Some insurance companies assign percentages of fault to determine damage awards.

Filed a claim

You may need to file a claim for something other than an accident, like theft, vandalism, fire, or weather-related damage. Whether this results in higher premiums depends on several factors, including your state, your insurance company, and what caused the damage. For example, comprehensive insurance covers damage from hitting a deer, and if you do that once, your insurer may raise your rates to reflect the risk of you filing a similar claim in the future.

Added a driver

Insurers recommend adding drivers to your policy if they drive your car regularly, whether they’re a roommate, significant other, child, or friend. Adding a low-risk driver, like a 34-year-old with a good driving record, will cause a much smaller increase than adding high-risk drivers, like new drivers or anyone with a history of traffic violations.2

Claims in your area have increased

Insurance companies set rates based on risk, and your location is a significant car insurance rating factor. For example, U.S. drivers in urban areas often pay more, given the higher rates of accidents, theft, and vandalism in their area. If claims in your area increase due to more theft, collisions, or even severe weather events, you could see increases in your premiums.

How to get cheaper car insurance rates

You have many strategies available to lower your auto insurance premiums. When renewal time comes around, it’s a good idea to review your insurance coverage to make sure it matches your needs. Here are some ways you can save money on car insurance.

Where car insurance rates are increasing the most

Insurify’s data science team predicts a total 22% increase in auto insurance costs in 2024, but rates are rising even faster in some states. Several factors contribute to this, from hailstorms in Missouri, Illinois, and Minnesota to hurricanes in North Carolina. Auto thefts also drive up premiums, and Missouri, California, and Illinois were among the top states for car thefts, according to the National Insurance Crime Bureau (NICB).

Reasons why car insurance rates are increasing nationally

Intertwining economic factors have caused the national average cost of car insurance to rise. Severe weather events, more technologically complex vehicles, mechanic labor shortages, the high price of new cars, and other factors are all leading to more expensive claims for insurers.

The influence of each factor can vary based on your location, vehicle type, and more, so despite national increases, it’s worth shopping around to know you’re paying the best rate for your ideal coverage.

Climate change and severe weather

The number of weather events causing more than $1 billion in damage is increasing. From 2019 to 2023, the U.S. saw an average of 20.4 billion-dollar weather events per year — a significant increase from the 13.1 events annually from 2010 to 2019, according to data from the National Oceanic and Atmospheric Administration (NOAA).

Comprehensive car insurance covers damage from weather events, so while natural disasters historically affect home insurance costs more than auto premiums, auto insurance companies are starting to feel the squeeze. The increasingly frequent and extreme weather events bringing golf-ball-sized hail and catastrophic flooding to new areas of the country are leading to more comprehensive claims and expensive payouts.

Vehicles are more expensive to fix

Vehicle maintenance and repair costs increased by 38% in the last five years, according to the Bureau of Labor Statistics’ Consumer Price Index. The advanced technology that helps drivers avoid collisions — and related premium increases — is expensive to repair. These advanced driver-assistance systems (ADAS) can add as much as 37.6% to the total repair cost following an accident, according to AAA.4

As vehicles and technology become more complex, mechanic labor hours have increased by more than 40% per claim, according to CCC Intelligent Solutions. Even finding a mechanic to make the repairs can be challenging. A TechForce Foundation study found the U.S. is facing a shortage of more than 600,000 auto and collision technicians. In addition, electric vehicles cost more and take longer to fix than gas-powered cars, according to a report from CCC.

Price of new cars has increased

New vehicle prices have increased dramatically in recent years, according to Kelley Blue Book (KBB). The average transaction price fluctuated around $48,000 in 2024 — up $11,000 from the $37,000 average before the COVID-19 pandemic. Vehicle age has also reached an all-time high of 12.6 years, according to S&P Global, meaning more drivers are keeping their vehicles longer.

Most insurers offer discounts for new cars since they’re safer and more reliable, but they’re also more expensive to insure, given the high replacement cost and complex repairs. Insurance is often much cheaper for older vehicles. For example, insuring a 2011–2012 Honda Civic averages $1,968 annually, while a 2023–2024 model averages $3,425 per year, according to Insurify data.

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