Auto Insurance Rates Decreasing in 2021 for the First Time in a Decade

Auto insurance rates have fallen for the first time in over a decade — decreasing by 1.7% across the U.S. for 2021 according to ValuePenguin.com’s State of Auto Insurance in 2021 report published this week.

The rate decrease in 2021 is an anomaly caused by fewer Americans driving in 2020 due to the COVID-19 pandemic. Less drivers on the road, and a steep reduction in claims brings the average cost of Auto Insurance in 2021 to $1,636.

Key Findings:

• Auto insurance rates have fallen for the first time in over a decade — decreasing by 1.7% across the U.S. for 2021. The biggest year-over-year rate decrease in auto insurance rates are in Arkansas (4.8%), Ohio (4.3%) and Michigan (4.3%). Five states will see marginal increases, including New York by 1.2% and Indiana by 1.1%, despite a decrease in the national average.
• The average cost of car insurance in 2021 is $1,636: Drivers who reside in Maine, North Carolina and Indiana have the lowest auto insurance rates – 40% cheaper than the national average. However, auto insurance rates in Michigan retained its spot as most expensive, and are 353% higher than the national average. Florida and Rhode Island ranked 2nd and 3rd most expensive.
• A traffic violation will lead to an average premium increase of 117% in 2021: North Carolina drivers will see the biggest increase in premiums (255%) due to a traffic violation. Florida auto insurance companies are the most forgiving, increasing premiums by just 55% on average. Individuals with DUI violations will see their premiums increase by 157% on average in 2021, and minor violations, such as a failure to obey traffic signs, will also see insurance premiums rise 28%.
• Auto Insurance premiums are 106% more expensive when compared to a decade ago. While 2021 sees its first drop in auto insurance premiums in a decade, rates are significantly higher than what Americans paid a decade ago, and rates have increased every year since 2011.
• Rates Will Rebound in 2022 and Here’s Why: As Americans get back to normal, auto insurance rates will rise again. The increase in distracted driving, and more expensive claims from smart technology in vehicles will continue to drive rate increases.

According to Sterling Price, Auto Insurance expert at ValuePenguin.com, “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.” He adds, “Our analysis shows that premiums can vary by 242% between the largest insurance companies, so you can save a lot by 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%.”

ValuePenguin.com analysts analyzed 15 million auto insurance quotes for drivers across the country from the Quadrant Information Services database. These, combined with RateWatch filings, were used to illustrate the current and historical overview of the auto insurance industry. Analysts used a 30-year-old male who drove a 2015 Honda Civic EX, as a sample driver for this analysis, and quotes were drawn from all available ZIP codes across the United States. To view the full report, visit: https://www.valuepenguin.com/state-of-auto-insurance-2021