The Cost Of Car Insurance Jumped 24 Percent In 2023

Great news! Most Americans are paying less than $3 per gallon for gas! Unfortunately for us, that doesn’t mean we’re really saving much money overall since any potential savings are most likely being eaten up by an increase in the cost of car insurance. As CBS News reports, car insurance rose six times the rate of inflation in 2023. On average, the cost of full coverage rose to $2,019 per year. That works out to a 24 percent increase over 2022 when full coverage cost $1,633.

Gen Z and Millenials Are Having Trouble Making Car Payments On Time

As far as why this is happening, a lot of it has to do with problems caused by the pandemic. Car values are still inflated, and supply chain issues, as well as inflation, mean a lot of parts are more expensive. There’s also a mechanic shortage, which means repairs take longer, and insurance companies have to spend more money providing policyholders with rental cars. Climate change is also making things more expensive, as more frequent extreme weather events are damaging cars at a higher rate, leading to higher insurance premiums.

That said, certain states are a lot more expensive to insure a car than others. And it’s not necessarily the ones that you think. Michigan, for example, has a reputation for being an extremely expensive state to get car insurance because of its history of being a no-fault state. And yet, it’s currently only the ninth most expensive state, coming in at $2,640 a year. Washington, D.C. places sixth and comes in at $2,756, while third place Florida will cost you $2,917.

See also A Warning to Hurricane Ian Policyholders About Loss Mitigation Versus Loss Prevention—A Sue and Labor Clause Analysis Can an insured recover costs to prevent a loss under a property insurance policy? If a loss occurs, can an insured recover the costs to reduce or mitigate damage from further damage? The answer is to read the full policy terms to make this determination. Generally, property insurance policies have terms which follow maritime and inland marine forms which require the policyholder to take steps to reduce or mitigate a previous loss and usually pay costs to do so. It is much less likely that a policy will reimburse fully for the costs to prevent a loss from occurring—but read the policy carefully. This issue involving a sue and labor provision was discussed by the Florida Supreme Court. Following prior case precedent interpreting the sue and labor clause, the court explained that: “An insured has the duty to exercise the care of a prudent, uninsured owner to protect insured property so as to minimize or prevent the loss for which the insurer would be liable. The purpose of the sue and labor clause is to reimburse the insured for those expenditures which are made primarily for the benefit of the insurer to reduce or eliminate a covered loss.” Did the sue and labor also pay for costs to prevent a loss? Not in that policy: “…Zurich correctly contends that the Sue and Labor clause in the Swire-Zurich policy is specifically applicable only after an actual loss has occurred or is occurring. Because Swire was acting to prevent a potential collapse of the building, and no actual loss had occurred, the $ 4.5 million expended by Swire is not recoverable under the policy’s Sue and Labor clause. …the policy’s Sue and Labor clause applies only in the case of an actual, covered loss. Any other conclusion would result in the Sue and Labor clause becoming the primary coverage provision of this contract without regard to the content of the contract or the coverage it was designed to provide. The reasoning suggested by Swire is certainly logical, to the effect that the preventive measures may have conferred a benefit upon the insurance company. If the Sue and Labor clause had been worded differently or if it had included language concerning the prevention of loss, the conclusion may have been different.” Hurricane Ian victims should be aware of property insurance provisions which require a policyholder to repair and take action to prevent further loss or damage. With soon to be Hurricane Nicole about to strike Florida, these provisions are important duties. Policies may also provide benefits to take these emergency and temporary repairs before the winds and rains of Hurricane Nicole cause further damage. Thought For The Day “You can never protect yourself 100%. What you do is protect yourself as much as possible and mitigate risk to an acceptable degree. You can never remove all risk.” Kevin Mitnick

The winner, however, is New York, where you can expect to pay an average of $3,374 per year to keep your car on the road. Why anyone who lives in New York City even bothers owning a car, we have no idea, but it’s certainly not because car insurance is cheap.