With US auto insurers’ approved rate changes finally taking effect at the start of 2021, a new report by ValuePenguin has found that the rates have fallen for the first time in over a decade.
For its report, ValuePenguin used the Quadrant Information Services database to assess 15 million quotes for drivers across the country. Information from RateWatch filings were also used to prepare the report.
According to the report, auto insurance rates across America decreased by 1.7% for 2021; the average cost of auto insurance in the US for 2021 is $1,636. However, it also found that premiums are still 106% more expensive when compared to prices in 2011.
ValuePenguin noted that 45 states saw their auto insurance premiums decrease by an average of 2.3%. The states that saw the biggest year-over-year decreases in rates were Arkansas (4.8%), Ohio (4.3%) and Michigan (4.3%) – although Michigan continues to pay the highest average auto insurance rates in the country, as much as 353% higher than the national average.
The five remaining states that saw their auto insurance rates increase in 2021 include New York (1.2% increase) and Indiana (1.1%).
The report also found that a traffic violation would lead to an average premium increase of 117% in 2021. In terms of specific states, drivers in North Carolina will see the biggest increase in auto insurance rates due to a traffic violation – a 255% spike. By comparison, the state of Florida has the least increase in auto rates following a violation, at only 55%.
Drivers with DUI violations will see their premiums increase by 157% on average in 2021, ValuePenguin noted. Meanwhile, those charged with minor violations (such as failing to obey traffic signs) would see a 28% average increase in their insurance.
While rates may have dropped for 2021, the study suggests that they could rebound in 2022. ValuePenguin says this is to be expected, as pandemic restrictions are loosened up and people return to work. The report also cites the increase in distracted driving cases and the rising cost of repairs to smart technology in newer cars as other factors in the future increase of auto insurance rates.
“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,” said ValuePenguin research analyst and study author Sterling Price.
Price added that based on the findings, drivers can save a lot on auto insurance by carefully 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%,” the research analyst advised.
