Auto Insurance Rates Decreasing in 2021 for the First Time in a Decade

Rhea-AI Summary

Auto insurance rates in the U.S. have decreased by 1.7% in 2021, marking the first decline in over a decade, according to ValuePenguin.com. This change is linked to reduced driving during the COVID-19 pandemic, resulting in fewer claims. The average auto insurance cost is now $1,636, with states like Arkansas and Ohio seeing significant reductions. However, Michigan remains the most expensive state for auto insurance. Concerns are raised that rates may rebound in 2022 due to increased driving and technological claims costs.

Positive

• First decrease in auto insurance rates in over a decade.
• Average cost of auto insurance drops to $1,636.
• Significant decreases in states like Arkansas (-4.8%) and Ohio (-4.3%).

Negative

• Michigan remains the most expensive state with rates 353% higher than the national average.
• Auto insurance premiums are still 106% higher compared to a decade ago.
• Projected increases in rates due to rising distracted driving incidents.

NEW YORK, Jan. 7, 2021 /PRNewswire/ -- Auto insurance rates have fallen for the first time in over a decade — decreasing by 1.7% across the U.S. for 2021 according to ValuePenguin.com's State of Auto Insurance in 2021 report published today.

The rate decrease in 2021 is an anomaly caused by fewer Americans driving in 2020 due to the COVID-19 pandemic. Less drivers on the road, and a steep reduction in claims brings the average cost of Auto Insurance in 2021 to $1,636.

Key Findings:

• Auto insurance rates have fallen for the first time in over a decade — decreasing by 1.7% across the U.S. for 2021. The biggest year-over-year rate decrease in auto insurance rates are in Arkansas (4.8%), Ohio (4.3%) and Michigan (4.3%). Five states will see marginal increases, including New York by 1.2% and Indiana by 1.1%, despite a decrease in the national average.
• The average cost of car insurance in 2021 is $1,636: Drivers who reside in Maine, North Carolina and Indiana have the lowest auto insurance rates - 40% cheaper than the national average. However, auto insurance rates in Michigan retained its spot as most expensive, and are 353% higher than the national average. Florida and Rhode Island ranked 2nd and 3rd most expensive.
• A traffic violation will lead to an average premium increase of 117% in 2021: North Carolina drivers will see the biggest increase in premiums (255%) due to a traffic violation. Florida auto insurance companies are the most forgiving, increasing premiums by just 55% on average. Individuals with DUI violations will see their premiums increase by 157% on average in 2021, and minor violations, such as a failure to obey traffic signs, will also see insurance premiums rise 28%.
• Auto Insurance premiums are 106% more expensive when compared to a decade ago. While 2021 sees its first drop in auto insurance premiums in a decade, rates are significantly higher than what Americans paid a decade ago, and rates have increased every year since 2011.
• Rates Will Rebound in 2022 and Here's Why: As Americans get back to normal, auto insurance rates will rise again. The increase in distracted driving, and more expensive claims from smart technology in vehicles will continue to drive rate increases.

According to Sterling Price, Auto Insurance expert at ValuePenguin.com, "Car insurance can be a difficult and time-consuming topic to understand. This report attempts to unmask some of these key issues and uncover ways Americans can save more money." He adds, "Our analysis shows that premiums can vary by 242% between the largest insurance companies, so you can save a lot by comparing quotes. Switching your car insurance from full to minimum coverage could see your premiums reduce 155%, and improving your credit score could decrease your auto insurance premiums by as much as 70%."

ValuePenguin.com analysts analyzed 15 million auto insurance quotes for drivers across the country from the Quadrant Information Services database. These, combined with RateWatch filings, were used to illustrate the current and historical overview of the auto insurance industry. Analysts used a 30-year-old male who drove a 2015 Honda Civic EX, as a sample driver for this analysis, and quotes were drawn from all available ZIP codes across the United States. To view the full report, visit: https://www.valuepenguin.com/state-of-auto-insurance-2021 

How Much Will Auto Insurance Cost Across the US in 2021?
State	% Rate Change - 2020 to 2021	2021 Average Cost of Auto Insurance
Michigan	-4.3%	$7,406
Florida	0.5%	$2,795
Rhode Island	0.1%	$2,482
Louisiana	-4.2%	$2,337
Kentucky	-4.1%	$2,228
Arizona	-0.7%	$2,152
New York	1.2%	$2,075
Nevada	-3.1%	$2,047
Delaware	-2.7%	$2,042
Colorado	-1.9%	$1,992
Connecticut	-0.8%	$1,959
District of Columbia	-2.7%	$1,841
New Jersey	-1.6%	$1,811
Texas	-2.9%	$1,790
Maryland	-2.5%	$1,733
Oregon	-3.7%	$1,691
Utah	-2.0%	$1,656
United States Average	-1.74%	$1,636
Missouri	-2.1%	$1,610
Minnesota	-2.7%	$1,576
Illinois	-0.2%	$1,536
Oklahoma	-3.7%	$1,536
Georgia	-2.3%	$1,534
South Carolina	-0.7%	$1,505
Mississippi	-2.9%	$1,451
Massachusetts	0.4%	$1,439
South Dakota	-2.2%	$1,427
North Dakota	-2.4%	$1,399
Montana	-2.1%	$1,381
New Hampshire	-2.5%	$1,380
Alabama	-2.9%	$1,369
Nebraska	-2.0%	$1,367
West Virginia	-3.7%	$1,367
Kansas	-1.6%	$1,313
Arkansas	-4.8%	$1,310
New Mexico	-3.4%	$1,304
Wyoming	0.0%	$1,267
California	-0.9%	$1,216
Hawaii	-3.0%	$1,203
Pennsylvania	-3.4%	$1,194
Tennessee	-2.5%	$1,192
Washington	-2.5%	$1,158
Vermont	-2.9%	$1,135
Idaho	-0.9%	$1,132
Virginia	-1.4%	$1,130
Ohio	-4.3%	$1,043
Wisconsin	-2.9%	$1,037
Alaska	-2.8%	$1,034
Iowa	-2.1%	$1,033
Indiana	1.1%	$987
North Carolina	-1.5%	$976
Maine	-1.0%	$865

About ValuePenguin.com:. ValuePenguin.com and its parent company, LendingTree® (NASDAQ: TREE), have a common mission: to empower consumers with tools, information, and resources to help them make smarter, more informed financial decisions. For more information, please visit www.valuepenguin.com, like our Facebook page or follow us on Twitter @ValuePenguin. 
Additional Information: https://www.valuepenguin.com/auto-insurance 

Media Contact: 
Divya Sangam (Ms.)
646 693 8445
Divya@lendingtreenews.com

 

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SOURCE ValuePenguin.com

FAQ

What is the average cost of auto insurance in the U.S. for 2021?

The average cost of auto insurance in the U.S. for 2021 is $1,636.

Which states saw the biggest decrease in auto insurance rates?

Arkansas (4.8%), Ohio (4.3%), and Michigan (4.3%) had the biggest decreases.

How much have auto insurance rates changed over the past decade?

Auto insurance premiums are currently 106% more expensive compared to a decade ago.

Will auto insurance rates rise again in 2022?

Yes, rates are expected to rebound in 2022 due to increased driving and more complex vehicle technologies.

What impact did COVID-19 have on auto insurance rates?

COVID-19 led to reduced driving and claims, contributing to the 1.7% decrease in auto insurance rates for 2021.