Insurance rates are set to rise by an average of 8.4%, the highest in 6 years, due to an increase in car repair costs and claims.
2023 Auto Insurance Rate Predictions:
- The average cost of auto insurance is expected to rise, and 45 states will see their car insurance premiums increase in 2023.
- The average cost of full coverage car insurance in 2023 is $1,780/year, with Michigan, Florida, and Rhode Island residents paying the highest premiums.
- Drivers with traffic violations in 2023 will see their premiums jump 52% on average.
- Car insurance for new electric vehicles will be 28% higher than new gasoline-powered cars.
An insurance expert at ValuePenguin.com, said millions of Americans may be surprised when they receive their 2023 statements. “This year’s auto insurance rate increase is the highest rate increase since 2017. After two years of keeping rates low for drivers, car insurance companies are raising rates in 2023 due to an increase in car repair costs and claims.”
AVERAGE COLLISION CLAIM UP $1,000 IN ONE YEAR: While the number of paid collision claims as well as the average cost of those claims was down in the second quarter of this year compared to the first, both figures are up substantially from the same period a year ago. The average cost of a collision claim in the second quarter was $5,392, exactly $1,000 higher than the average claim during the same quarter a year ago. The average cost of a paid collision claim has now risen more than 40% since 2019.
Recent winter storms in conjunction with usual industry delays have the collision industry with a level of backlogs never seen before. According to a report, six shops contacted are all experiencing a wait of anywhere from six weeks to four months. Recent storms around the country have added to a backlog already resulting from supply chain woes and shortage of employees. Shops have been doing repairs in stages to get by, getting cars to the point of safe drivability even if they’re cosmetically unsightly. Anything to help people, as well as the shop’s operations, get moving again. Shops want the vehicles gone just as bad as the customers want them back.
-March 2023 Collision Report by Micah Strom