Weather impacts drive up U.S. auto insurance costs

Severe weather events are increasingly influencing auto insurance costs across the United States. With advancements in vehicle technology, repairs that were once straightforward and relatively inexpensive have become significantly more costly. Kelley Blue Book notes that features like rain-sensing wipers and heads-up displays can triple repair costs, making what was a $300–$500 fix now over $1,000.

The Insurance Information Institute (Triple-I) has long accounted for regional factors such as weather when calculating auto premiums. However, with extreme weather events becoming more frequent and affecting a larger number of people, claims costs are rising and impacting car insurance rates.

CoreLogic highlights that while hurricanes cause significant damage, severe thunderstorms occur more frequently. These storms include hail and strong winds, which can inflict expensive damage on vehicles. CCC Intelligent Solutions reports a 12% increase in hail-related auto claims in 2023, with these claims being 22% costlier to repair than average comprehensive claims.

“Extreme weather events are increasing in severity, becoming major disruptors in the auto claims and repair industry,” stated Kyle Krumlauf from CCC.

Insurance companies in Florida and Louisiana have reported considerable losses due to Hurricanes Ian and Ida, according to S&P Global’s report on the U.S. Auto Insurance Market. Similarly, states like Minnesota, Nebraska, Wisconsin, Texas, and Nebraska have experienced significant physical auto damage due to severe thunderstorms.

Data indicates increases in full-coverage car insurance correlate with rises in major hail events from 2022 to 2024 across several states including Missouri (182% rise), Illinois (108%), Indiana (107%), Texas (93%), and Pennsylvania (88%).

John Leach from Insurify explains that rising claims costs lead insurers to pay out more for damages due to high new- and used-vehicle prices. Factors such as inflation on auto parts prices, a shortage of technicians, advanced vehicle technologies contributing to higher repair costs also play roles.

Triple-I suggests that fraudulent personal injury lawsuits can further inflate premiums. “Any factor that causes an increase in claims can affect auto insurance rates,” said Leach.

Despite these challenges, Insurify projects only a modest increase of 5% in car insurance costs for 2025 compared to a steep rise since 2022. Notably, average premiums fell in 21 states during the latter half of 2024.