The average yearly premium for a full coverage policy jumped by 14% over the past year.
As the pandemic becomes a distant memory, drivers in the United States are once again hitting the road and experiencing higher car insurance premiums. According to Quadrant Information Services, the average yearly premium for a full coverage policy increased from $1,771 in the previous year to $2,014 in 2023, marking a staggering 14% rise.
The surge in auto insurance costs can be primarily attributed to inflation and the supply and demand issues plaguing the auto industry. Both the purchase and repair of new vehicles have become more expensive, with higher costs for parts and labor leading to increased insurance claims. In addition, rising healthcare expenses associated with accident-related injuries are also contributing to the overall increase in premiums.
Industry analysts foresee no relief in the future, so it is advisable for consumers to take proactive measures and seek more affordable auto coverage.
Auto insurance rates are heavily influenced by a policyholder’s personal information. Generally, younger, single, male drivers residing in densely populated urban areas with poor credit scores and a history of traffic violations pay the highest premiums. Premiums can also vary significantly between states due to various factors.
While certain factors like demographics and prior accidents cannot be changed, choosing a vehicle that is inherently cheaper to insure can help lower premiums. In general, vehicles that are driven conservatively, have top safety ratings, and are less expensive to repair tend to be more affordable to insure. According to Bankrate.com, the Subaru Outback crossover SUV is the most cost-effective option for 2023, with an average annual premium of $1,603 for full coverage. However, actual premiums may vary based on individual circumstances.
On the other hand, luxury vehicles that are expensive to repair and have higher salvage thresholds often command the highest premiums. This also applies to high-performance cars that encourage fast and reckless driving. For instance, owners of the Dodge Charger sports coupe can expect to pay an average of $2,824 per year for coverage, with even higher rates for individuals with prior moving violations or at-fault claims.
Electric cars, which have above-average sticker prices and rely on costly battery packs that can be totaled in an accident, also carry higher insurance costs. Bankrate.com reports that the compact Tesla Model Y SUV tops the list in this regard for 2023, with yearly premiums averaging $2,804.
Below, we present a list of the most and least expensive vehicles to insure out of the 27 models considered by Bankrate.com.
Aside from purchasing a new vehicle, individuals seeking affordable car insurance should compare prices across multiple carriers each year to see if better options are available based on their personal information. This is especially important for those who have recently undergone major life changes such as moving to a different city, getting married or divorced, or accumulating traffic violations and accidents. Some insurance providers are more willing to accept certain levels of risk at different price points compared to others.
Cost-conscious policyholders can also reduce liability coverage to the minimum required by the state, increase deductibles for comprehensive and collision damage, and eliminate add-ons like towing and rental car provisions.
Lastly, it is essential to take advantage of all available discounts offered by a specific insurance company. These may include rate reductions for teens and seniors who have completed approved safe-driving courses, customers who bundle multiple vehicles or homeowner’s insurance, those who pay their annual premiums upfront, and more. Many companies now even offer lower rates based on a motorist’s driving habits, using data collected from the vehicle’s onboard diagnostics port.
The Cheapest Cars To Insure For 2023
- Subaru Outback: $1,603
- Honda CR-V: $1,635
- Honda Pilot: $1,726
- Ford Escape: $1,734
- Honda Odyssey: $1,735
- Ford F-150: $1,753
- Jeep Wrangler: $1,820
- GMC Sierra 1500: $1,867
- Toyota RAV4: $1,869
- Nissan Rogue: $1,880
The Costliest Cars to Insure For 2023
- Dodge Charger: $2,824
- Tesla Model Y: $2,804
- Mercedes-Benz C300: $2,753
- Cadillac Escalade: $2,743
- Tesla Model 3: $2,577
Source: Bankrate.com, based on an average 40-year-old driver with a clean record and good credit for full coverage. The full report can be found here.
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