Car insurance rates to increase in 2023, survey says

Excerpt from foxbusiness.com

Auto insurance costs are forecasted to rise by another 7% in 2023

American drivers could face another year of rising auto insurance costs in 2023, as inflation and increasing claims drive premiums to a new high, a recent report showed. 

Due to rising inflation and traffic accident rates, drivers saw auto insurance costs increase by 9%, to $1,777 per year in 2022, according to Insurify's 2022 in review and what’s ahead for 2023 report.  

Auto insurance costs could rise by another 7% in 2023 to $1,895 per year, the report forecasted. Inflation and the continued rising cost of vehicles coupled with consumers driving more will drive the spike in insurance rates next year, Dan Roccato, professor of finance at the University of San Diego School of Business, said.  

"It's hard to see how this changes until we fix our inflation problem," Roccato continued.

However, drivers could see some relief from high insurance costs toward the end of 2023.

"The general consensus is that it will be eight to 12 months [from fall 2022] before rate increases begin to slow down, and some think it could be several years before prices fully stabilize," Betsy Stella, vice president of insurance partnerships at Insurify, said.

These states pay the most for car insurance

Oregon, Maryland and Virginia saw auto insurance rates rise by 25% in 2022, according to the report. And while Michigan drivers saw their rate increase by just 1%, they still paid, on average, $2,895 for coverage in 2022, $1,188 more than the average American.

In some instances, drivers said they saw rates increase more than once over the past year. Nearly half 28% said rates increased at least one time and 19% said they saw it increase multiple times.

One insurance rate expert said that in 2023 car insurance rates could feel some additional impact from climate change.

"If climate- and weather-related auto insurance claims increase, insurers will likely hike rates," Laura Adams, an award-Winning financial author, podcaster and spokesperson, said. "When insurance becomes less affordable, more consumers may risk driving with too little or no coverage."