Car Insurance Industry Statistics 2024: Premiums, Trends, and More
Barry Elad
Updated · Dec 05, 2024
Car insurance is one of those essential expenses most drivers in the US need to factor into their budget. Whether you’re a seasoned driver or just getting your license, the costs, coverage, and trends of car insurance can vary significantly depending on where you live and your driving profile. As we head into 2024, the car insurance industry continues to evolve, driven by technological advancements, regulatory changes, and shifts in consumer behavior. In this article, we’ll explore the latest statistics and trends shaping the car insurance landscape, offering a data-driven perspective to help drivers and industry stakeholders make informed decisions.
Editor’s Choice: Key Market Insights
- The global car insurance market is projected to reach $1.3 trillion by the end of 2024, growing at a compound annual growth rate (CAGR) of 6.5% from 2020.
- The US car insurance market alone was valued at $316 billion in 2023, and it’s expected to surpass $335 billion by the end of 2024.
- Telematics-based insurance policies, which use data from a vehicle’s telematics system to assess premiums, grew by 12% in 2023 and are predicted to grow by another 10% in 2024.
- California remains the state with the highest average annual premium, at approximately $2,619 per year, compared to the national average of $1,553.
- The percentage of uninsured drivers in the US stands at 12.6%, with Florida having the highest rate of uninsured drivers at 20.4%.
- Electric vehicle insurance premiums are, on average, 20% higher than for gas-powered vehicles, primarily due to higher repair costs.
- The rise of artificial intelligence in claims processing has reduced the average claim settlement time by 25%, significantly improving customer satisfaction.
Global Market Size and Trends
- The global car insurance market is forecasted to grow from $0.99 trillion in 2020 to $1.3 trillion by 2024, driven by increasing vehicle ownership and rising regulatory requirements for insurance.
- By 2024, the Asia-Pacific region is expected to account for 30% of the global car insurance market, largely due to the rise in middle-class incomes and increased vehicle sales in countries like India and China.
- The use of big data and AI-powered analytics in underwriting is predicted to drive efficiency, cutting policy processing times by 40% by 2024.
- In Europe, comprehensive car insurance policies are anticipated to increase in demand by 15%, due to growing environmental concerns and the rise in electric vehicle purchases.
- The telematics insurance market, which includes usage-based policies, is projected to grow at a CAGR of 18.5%, reaching a global market value of $125 billion by 2024.
- Self-driving cars are expected to disrupt traditional car insurance models, with 63% of insurers already preparing new policies that account for shared liability between manufacturers and owners.
- As of 2023, 52% of drivers globally were interested in pay-as-you-drive insurance models, and this figure is expected to rise to 65% by 2025.
Car Insurance Statistics by State
- Michigan continues to hold the top spot as the most expensive state for car insurance, with average premiums around $4,003 per year in 2023. This is largely due to the state’s no-fault insurance laws.
- Hawaii has the lowest average car insurance cost, coming in at just $824 annually, thanks to its state laws limiting the impact of driver demographics such as age and gender.
- California, with its large population and high traffic density, saw an average insurance premium of $2,619 in 2023, ranking as the second most expensive state.
- Florida’s average car insurance premiums stand at $2,560, partly driven by the state’s high number of uninsured drivers and frequent severe weather events.
- New York ranks among the top five most expensive states, with average annual premiums of $2,239. This is due to its dense urban areas and higher cost of living.
- Ohio boasts one of the lowest average car insurance costs, with drivers paying an average of $1,034 annually, attributed to the state’s relatively low accident and theft rates.
- Louisiana saw a significant increase in premiums in 2023, with rates rising by 8.2% due to frequent claims from weather-related damages.
Car Insurance Affordability
- On average, car insurance premiums in the US accounted for 2.4% of the average household income in 2023, but this percentage can vary widely by state.
- Drivers with poor credit scores pay, on average, 69% more for car insurance compared to those with excellent credit, significantly affecting affordability for low-income individuals.
- Young drivers, particularly those aged 16-25, pay some of the highest premiums, with an average annual cost of $4,276, making insurance unaffordable for many without family assistance.
- Low-mileage drivers (those who drive less than 5,000 miles annually) can save up to 20% on their car insurance premiums with mileage-based policies.
- Seniors aged 65 and older typically see their premiums increase by 10-15%, especially in states that allow age-based premium adjustments.
- Multi-policy discounts, where drivers bundle home and auto insurance, helped reduce premiums by an average of 15% in 2023.
- Military personnel and veterans often qualify for special discounts, reducing their premiums by up to 25% through providers such as USAA.
Percentage of Uninsured Drivers by State
- Florida leads the nation in uninsured drivers, with 20.4% of motorists uninsured as of 2023, significantly higher than the national average of 12.6%.
- Mississippi follows closely, with 20.1% of drivers uninsured, contributing to higher premiums for insured drivers in the state.
- New Jersey has one of the lowest rates of uninsured drivers, with only 3.1% of its drivers uninsured in 2023, thanks to stringent state insurance laws.
- California, despite its high insurance costs, has a relatively low uninsured driver rate of 13.7%, but this still translates to millions of uninsured vehicles.
- Alaska saw a significant reduction in uninsured drivers, dropping from 16% in 2021 to 10.2% in 2023, due to new state-enforced penalties for uninsured motorists.
- North Carolina maintains one of the lowest uninsured rates, at 6.5%, thanks to robust state insurance requirements and enforcement measures.
- Texas has an uninsured driver rate of 14.1%, contributing to higher premiums, especially in urban areas such as Houston and Dallas.
| State | Percentage of Uninsured Drivers |
| Florida | 20.4% |
| Mississippi | 20.1% |
| New Jersey | 3.1% |
| California | 13.7% |
| Alaska | 10.2% |
| North Carolina | 6.5% |
| Texas | 14.1% |
Key Factors Affecting Premiums
- Driver age remains one of the most significant factors affecting premiums. Younger drivers under 25 typically pay up to 2.5 times more than middle-aged drivers due to their higher likelihood of accidents.
- Location plays a crucial role in determining premiums. Urban drivers tend to pay 35% more than those in rural areas due to higher accident rates and increased theft risks.
- Driving history can increase premiums drastically. A driver with a single at-fault accident could see their insurance premiums rise by an average of 45%.
- Vehicle type impacts premiums, with luxury vehicles costing 20-30% more to insure than standard vehicles due to higher repair and replacement costs.
- The credit score is used as a pricing factor in many states, and drivers with poor credit scores can pay as much as 71% more for insurance compared to those with excellent credit.
- Annual mileage also affects premiums, with high-mileage drivers (over 20,000 miles annually) paying about 12% more than low-mileage drivers.
- Gender is a factor in some states. For example, male drivers under 30 can pay as much as 12% more than their female counterparts in certain regions.
Coverage Insights
- Liability coverage is mandatory in most states, with minimum coverage limits varying widely. In 2023, the average liability premium was $650 annually.
- Comprehensive and collision coverage, which protects against non-liability claims such as theft and natural disasters, averaged $420 and $290 per year, respectively, in 2023.
- Uninsured motorist coverage is growing in importance, with 1 in 8 drivers in the US being uninsured. In states like Florida, where 20% of drivers are uninsured, this coverage can add $150-$200 to annual premiums.
- Personal injury protection (PIP) is mandatory in no-fault states like Michigan and adds an average of $450 to premiums.
- Gap insurance, which covers the difference between a vehicle’s depreciated value and the amount owed on a loan, was increasingly adopted in 2023, with 35% of new car buyers opting for this coverage.
- Rental reimbursement coverage, which provides for a rental car if your vehicle is being repaired after an accident, costs an average of $50-$75 per year.
- Roadside assistance, often bundled with comprehensive coverage, costs an additional $10-$15 annually but provides peace of mind for drivers in the event of a breakdown.
Technological Influence on Insurance Rates
- Telematics technology, which tracks driving behavior through devices or mobile apps, led to an average premium reduction of 10-15% for safe drivers in 2023.
- The use of AI in claims processing is speeding up claims handling, reducing the average settlement time by up to 40%, leading to lower administrative costs for insurers.
- Autonomous vehicles are expected to significantly reduce premiums by 25% by 2030 as accidents caused by human error decrease.
- Vehicle safety features, such as automatic emergency braking and lane departure warnings, led to lower premiums for 73% of drivers with cars equipped with these systems.
- Connected cars, which report real-time data on vehicle health and driving behavior, are anticipated to reduce the frequency of breakdowns and claims by 15% in the next few years.
- Insurance mobile apps, now offered by over 80% of insurers, provide customers with real-time policy information, claim filing, and driver discounts, improving customer experience.
- Blockchain technology is being explored by insurers to increase transparency in policy management and claims handling, reducing fraud and saving costs.
Regional Variations in Insurance Costs
- Northeast states, such as New York and Massachusetts, saw some of the highest average premiums, at $1,900 and $1,750, respectively, due to high urban density and stricter liability laws.
- Southern states, particularly Louisiana and Georgia, experienced premiums as high as $2,200 in 2023, largely due to frequent severe weather and higher rates of litigation.
- In Western states like California and Nevada, premiums averaged $1,800, with wildfire risk contributing to higher comprehensive coverage costs.
- Midwestern states, including Ohio and Iowa, boasted some of the lowest insurance costs, averaging $1,100 annually, thanks to lower traffic density and accident rates.
- Florida‘s premiums remain high due to its no-fault insurance system and a large number of uninsured drivers, with residents paying an average of $2,560 annually.
- Texas, with a growing population and frequent extreme weather events, saw average premiums rise to $1,720 in 2023.
- Alaska and Hawaii showed significant variation, with Alaska’s average premiums at $1,420 due to long driving distances, while Hawaii remained the lowest at $824, benefiting from fewer cars and safer roads.
| Region | Average Premium | Factors Contributing |
| Northeast (e.g., NY) | $1,900 | Urban density, liability laws |
| Northeast (e.g., MA) | $1,750 | Urban density, liability laws |
| Southern (e.g., LA) | $2,200 | Severe weather, litigation |
| Western (e.g., CA) | $1,800 | Wildfire risks |
| Midwest (e.g., OH) | $1,100 | Low traffic density, accident rates |
| Florida | $2,560 | No-fault insurance, uninsured drivers |
| Texas | $1,720 | Extreme weather, growing population |
| Alaska | $1,420 | Long driving distances |
| Hawaii | $824 | Few cars, safer roads |
Number of Insurance Providers
- The US car insurance market is dominated by a few large companies, with the top 10 insurers holding 74% of the market share.
- State Farm remains the largest provider, holding 16.5% of the market, with $46.6 billion in premiums written in 2023.
- Geico follows closely, with a 14.4% market share, writing $40.7 billion in premiums last year.
- Progressive comes in third, with a 13.7% market share and $38.8 billion in written premiums.
- Allstate holds 10% of the market, with $28.4 billion in premiums, making it the fourth largest provider.
- USAA, which serves military families, has a 6.3% share of the market, with $17.8 billion in premiums written.
- There are over 5,900 car insurance providers operating in the US, but the top 10 companies dominate the landscape, leaving smaller insurers to compete on niche markets and regional policies.
| Provider | Market Share | Premiums Written |
| State Farm | 16.5% | $46.6 billion |
| Geico | 14.4% | $40.7 billion |
| Progressive | 13.7% | $38.8 billion |
| Allstate | 10% | $28.4 billion |
| USAA | 6.3% | $17.8 billion |
Recent Developments
- Usage-based insurance (UBI) continues to grow, with 25% of new policies in 2023 incorporating some form of telematics to track driving behavior.
- The shift to electric vehicles has prompted insurers to adjust premiums, with 20% of insurers now offering discounts to EV owners due to lower environmental impact.
- Climate change has become a significant factor, with insurers increasingly factoring in weather-related risks such as hurricanes and wildfires into their pricing models.
- AI-powered claims processing is now being adopted by 45% of major insurers, reducing costs and improving claim response times by up to 30%.
- Insurance fraud detection technology, including machine learning algorithms, saved the industry an estimated $5.2 billion in fraudulent claims in 2023.
- Pay-per-mile insurance saw a 15% increase in adoption, as more drivers work remotely and drive fewer miles post-pandemic.
- The introduction of climate-related discounts for low-emission and fuel-efficient vehicles is expected to be a major trend in 2024, as insurers respond to increasing regulatory pressure to support environmental goals.
Conclusion
As we move into 2024, the car insurance industry continues to evolve, driven by technology, environmental considerations, and changes in consumer behavior. From the growth of telematics-based policies to the impact of climate change on premium rates, insurers are adapting to new challenges and opportunities. Understanding these trends and leveraging the latest statistics can help consumers make better decisions and insurers stay competitive in a rapidly shifting market.
Sources
Barry Elad
Barry Elad is a dedicated tech and finance enthusiast, passionate about making technology and fintech concepts accessible to everyone. He specializes in collecting key statistics and breaking down complex information, focusing on the benefits that software and financial tools bring to everyday life. Figuring out how software works and sharing its value with users is his favorite pastime. When he's not analyzing apps or programs, Barry enjoys creating healthy recipes, practicing yoga, meditating, and spending time in nature with his child. His mission is to simplify finance and tech insights to help people make informed decisions.
