Jessica Edmondson Director of Media Outreach | Insurify
Regulators in Nevada, Washington, and New York have approved the largest total amount of auto insurance rate increases over the past two years. According to S&P Global’s U.S. Auto Insurance Market Report, Nevada alone has seen a 45.7% increase in approved rates since early 2023.
S&P's report highlights a "generational hard market" where insurers are seeking substantial rate hikes. Several factors contribute to rising car insurance costs, including increased traffic levels, bad driving habits, and inflation. Supply chain issues, insurance fraud, higher medical costs, and litigation further impact these rates.
The Nevada Division of Insurance outlines that fraud and personal injury litigation can escalate costs for insurers. The state uses a prior-approval system for personal auto insurance rates, meaning insurers must use state-approved rates.
Despite this regulatory framework, competition plays a significant role in rate changes. The Nevada Division of Insurance stated that if insurers incur losses due to inadequate rates, they might tighten eligibility guidelines or even exit the market. "If the Division does not approve appropriate rate increase requests, carriers could become unprofitable," it noted.
Maryland tops the list as the most expensive state for auto insurance with annual full coverage costs surpassing $4,000 in 2024. Factors such as increased car thefts and legislative changes requiring enhanced underinsured motorist coverage contribute to high rates.
In contrast to these states experiencing steep hikes, North Carolina has approved only a 9.1% increase since 2023—the lowest among all states according to S&P Global data. Hawaii follows closely with a 10.7% rise.
While car insurance costs surged significantly in 2023 due to underwriting losses within the industry, projections indicate slower growth ahead with an estimated 5% increase in 2025.
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