Why are auto insurance premiums soaring in California?

Auto insurance rates have been skyrocketing across the nation but motorists in California are being hit particularly hard.

The Golden State saw a two-year rate hike of 54% with the typical cost of a 2024 auto insurance policy for a driver with a clean record and a $1,000 deductible reaching $2,681, according to a report by insurance comparison shopping website Insurify .

“During COVID-19 shutdowns, states like California put a freeze on rate increases. That’s why so many people saw drastic rate hikes in 2023 after those restrictions were lifted,” Insurify director of sales and service Mallory Mooney said. “Insurers are still playing catch-up, and it’s too little too late for a lot of them. Insurers have had to pull out of some markets completely.”

Insurance companies say they are seeing a rise in accident claims and are passing along the increasing costs of repairs, especially for newer cars with advanced technology.

Consumer Reports offered some tips for motorists looking to save money on their car insurance.

• Shop around
• Increase your deductible
• Consider dropping collision or comprehensive coverage
• Take a defensive driving course
• Bundle your auto insurance

Adding to California’s problems is a new law that will increase providers’ liability limits in 2025. That will mean higher payouts for insurance companies, KTLA’s Eric Spillman reported.

California isn’t the only state getting slammed with higher insurance premiums. Rates have gone up across the country.

Maryland has the highest car insurance costs in the U.S., with an average full-coverage rate of $3,400 annually, according to the report.

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