Why Did My Car Insurance Rates Go Up In 2025?

Everywhere you turn, prices are on the rise, making it challenging to afford essentials and other required items, like car insurance.

Many drivers across the country are receiving auto insurance renewal notices with unexpectedly high increases. If you’re asking yourself, “Why did my car insurance rates go up?” you’re not alone. Learning why car insurance rates keep can better equip you to find cheaper prices.

Car Insurance Rate Increases by Year

Car insurance rates have steadily increased over the last four years, according to our analysis of national averages. The average auto insurance cost per year in 2024 was 33% higher than in 2023.

That’s for coverage of $100,000 for injuries to one person, $300,000 for injuries per accident and $100,000 for property damage, with uninsured motorist coverage, and collision and comprehensive insurance with a $500 deductible.

Car Insurance Costs by Company, 2023-2024

Here’s a look at top car insurance companies and how their rates have changed from 2023 through 2024. Some companies’ rates have consistently increased, while others have fluctuated over the years.

Highest Rate Increases by State

Wyoming had the highest rate increase by state (39%) when comparing rates from 2024 to 2023. New York had the highest dollar amount increase, over $750 year over year.

Here are the top 10 states with the highest rate increases, according to our analysis.

What’s Causing the Rapid Increase in Car Insurance Rates?

Inflation is one reason car insurance rates continue to climb. Costlier claims are also driving car insurance rates higher.

Key factors contributing to the seemingly sudden increase in car insurance costs include:

Broken Supply Chains and Shortages

The pandemic significantly disrupted global supply chains, making some auto parts scarce and driving up their prices due to the basic law of supply and demand. This increased parts prices led to higher car repair costs, which in turn caused auto insurance rates to rise.

Ongoing geopolitical issues, natural disasters and work stoppages persist, elevating auto insurance costs.

While supply chains and shortages have improved, they haven’t fully returned to pre-pandemic conditions. That keeps expenses high and makes car insurance more expensive.

Climate Change

Climate change may lead to more frequent disasters—such as flooding, storms and wildfires—that put more vehicles at risk of harm. If catastrophic weather events cause more auto claims, insurers may try to pass those costs onto you through increased insurance premiums.

For instance, Florida is often confronted with hurricanes and tropical storms and has an average car insurance cost of $3,536 per year. Vermont, which isn’t prone to hurricanes and other catastrophic weather, has an average rate of $1,237.

Electric Vehicle Adoption

Experts hope more drivers adopting electric vehicles (EVs) will lower emissions and slow climate change. EVs may be good for the environment but they can be expensive for car insurance.

EVs can be expensive to repair or replace, making them expensive to insure.

Planning to buy an EV? Take a look at our list of the most and least expensive green cars to insure.

Increase in the Theft of Vehicles and Car Parts

Vehicle theft rates have steadily risen since 2019, according to the National Insurance Crime Bureau. The NICB found that auto thefts surpassed 1 million in 2023, driving auto claims and car insurance rates higher.

Include comprehensive insurance on your policy to ensure you can file a claim if your car or its parts are stolen.

While catalytic converter thefts are decreasing after a surge, the cost of the repair is still high. The average catalytic converter claim (to repair the car and replace the part) is around $2,900, according to State Farm.

Inflation

Like many sectors of the economy, auto insurance is feeling the effects of inflation.

Cars have become much more expensive to repair and replace, causing car insurance rates to rise to cover future claim payouts.

New and used car prices have skyrocketed in the last few years. Auto parts needed for repairs have become more expensive, as have labor costs in the repair shops.

Slower Claims Can Cost Insurers More

Many drivers are finding the claims process takes a lot longer now. The average repair time is 22 days, up from 12 days pre-pandemic. That’s according to a 2024 J.D. Power Survey of more than 9,700 auto insurance policyholders who settled a claim recently.

If your auto insurance pays the cost of a rental car during extended repair periods, it costs them significantly more per year in claims.

Why Is My Car Insurance So High?

Car insurance costs can be high for a host of reasons. Your unique driver profile influences the amount you’ll pay, as insurers consider factors such as your age, driving record and location. Increased repair costs and more claims related to natural disasters are also fueling the surge in auto insurance costs.

Personal and Social Factors

Your personal details affect your car insurance cost, including:

Driving Skills

Your skills behind the wheel and those of other drivers on your policy impact your auto policy’s premium.

Choice of Vehicle and Safety

Car Make and Model

The kind of vehicle you own can substantially affect your auto insurance costs, particularly if you opt for collision and comprehensive coverage. For instance, our analysis of the most and least expensive cars to insure revealed that the following popular models are among the cheapest and the most expensive to insure:

Here are more items related to your vehicle that impact how much you’ll pay for car insurance:

Choice of Car Insurance Company and Previous Policies

The car insurance company you choose and your coverage history also influence what you pay for auto insurance.

Is It Normal for Car Insurance Rates To Go Up for No Reason?

No. You may not see at first glance a reason for car insurance rates to go up, but there should be an associated cause that the auto insurance company can explain to you and your state’s insurance regulator.

If your renewal paperwork doesn’t explain the reason for a rate hike, contact your insurer for an explanation.

Higher rates could be due to personal factors like your current age bumping you up to a higher pricing tier. Or it could be due to other factors outside your control. For example, if there’s more crime or accidents in your area now or the costs of car repairs or medical treatments have increased.