The surge in California car insurance rates shows no signs of slowing down, with premiums expected to skyrocket by the end of the year due to rising accident and repair costs.

According to a state-by-state auto insurance survey conducted by Insurify, an insurance comparison shopping site, California car insurance premiums are projected to increase by a staggering 54% over the two years from 2023 to 2024. As of late June, the average car insurance premium for a typical policy, which includes a $1,000 deductible and a clean driving record, was $2,417. By the end of this year, it is expected to rise to $2,681.

Mallory Mooney, the Director of Sales and Service at Insurify, explained, "Insurance companies operating in California froze car insurance rates during the pandemic. Since 2023, with the easing of regulations, insurance rates have increased significantly." She added, "Insurance companies are continuously raising rates to recoup losses from the freeze period. However, these increases have been too small and too late, leading some insurers to seriously consider pulling out of certain states altogether."

Insurance companies are concerned about declining profits due to increased claims from car accidents and rising repair costs for new cars equipped with advanced technology. Moreover, with California set to increase its auto liability insurance coverage limits starting in 2025, further premium hikes appear inevitable.

Meanwhile, Consumer Reports advises that to save even a penny on premiums, drivers should consider raising their deductible, and potentially forgoing Collision Coverage (for repairs to their own vehicle) and Comprehensive Coverage (for damages from theft, destruction, or fire). Additionally, drivers can receive discounts by taking a defensive driving course or bundling their auto insurance with homeowners insurance.

<Sehee Roh>