As Americans resume normal economic activities in 2022, auto insurance rates will rise by 0.6% in 2022 after falling in 2021, according to the State of Auto Insurance in 2022 report from ValuePenguin.com by LendingTree. The average cost of auto insurance is expected to reach $1,935 annually, with 22 states seeing car insurance premiums increase in 2022. Here are the key findings:
- The Omicron variant’s impact on car insurance: The impact of the Omicron variant on auto insurance rates in 2022 and beyond should be minimal. Insurers are not likely to give out COVID-19 discounts to drivers unless there is another nationwide lockdown.
- 22 states will see car insurance rates increase by 1% or greater in 2022. Nebraska (4.4%), Minnesota (2.5%) and Arizona (2.2%) will experience the largest rate hikes in 2022. In 14 states, however, car insurance premiums will fall by an average of 1%.
- The average cost of car insurance in 2022 is $1,935/year. Michigan, Florida and Louisiana will have the highest and Maine, Texas and Wisconsin the lowest car insurance premiums in 2022.
- Unsafe drivers will pay 55% more for auto insurance in 2022. Drivers who get a DUI can expect to see their rates increase by an average of 90% this year. And Texan drivers will experience the steepest increase in premiums (142%) if they get a ticket or get into an accident in 2022.
- Car insurance premiums will continue to rise in 2023: As Americans return to their pre-pandemic lives, more cars on the road will lead to more accidents, more claims and higher premiums. A steep increase in distracted driving, more expensive repairs from smart technology and supply chain shortages will also contribute to rising premiums.
The car insurance rate increase in 2022 is still below pre-pandemic levels. Premiums increased in previous years by anywhere from 5-6%, respectively. In fact, rates have increased every year since 2011, says LendingTree. Insurers may not be giving out COVID discounts, but that does not mean that there is no way to save. Approximately 76% of Americans who shopped around for insurance say they saved hundreds of dollars doing so. Pay-per-mile insurance is another way to save if you are still working from home and driving fewer than 12,000 miles a year.
LendingTree said it reviewed 15 million auto insurance quotes for different drivers across 35,000 zip codes and 72 insurers. These, combined with RateWatch filings, were used to present the current and historical pictures of the auto insurance industry and how consumers will be impacted.
The full report can be viewed here.