America Is Parked: Car Insurance Rates Fall For the First Time Since 2013

America Is Parked: Car Insurance Rates Fall For the First Time Since 2013

AUSTIN, Texas, Feb. 3, 2021 -- The Zebra, the nation's leading insurance comparison site, released its 2021 State of Auto Insurance Report revealing the national average annual cost for car insurance to be $1,483, down 3.9% since 2020.

The Zebra's 5th annual State of Auto Insurance Report details an under-the-hood look at what dictates car insurance rates across all 34,500 U.S. ZIP codes and examines a decade's worth of data to reveal trends in pricing across the nation.

"Throughout 2020 drivers have consistently asked, 'Why aren't my car insurance rates affected now that I'm barely driving?'," says Nicole Beck, Head of Communications and licensed insurance agent at The Zebra. "On the whole, rates have decreased 4% nationwide and many drivers received additional rebates in 2020 from their insurer. However, reduced mileage is only a small part of how insurance costs are calculated, which heavily weighs more static factors like where you live, your accident history and your age."

COVID-19 Impact on Car Insurance Rates
As COVID-19 created changes to typical travel habits, the number of miles traveled by U.S. drivers dropped 14% from 2019-2020, according to the Federal Highway Administration. While annual miles driven factors into car insurance pricing, typically the savings are small (6%). The pandemic's impact reached beyond a simple drop in mileage and presumably led to fewer claims filed due to less driving in general: commuting, recreational and vacation. A reduction in claims leads to a reduction in rates. Prices are expected to increase once drivers file more claims when driving behavior returns to baseline and beyond.

Car Insurance Prices Down Nationally For the First Time Since 2013
While volatility is commonplace in insurance pricing, the 4% drop can be attributed to the nation's driving halt during the COVID 19 related lockdowns and switch to work from home for many Americans. This drop does not factor in discounts many carriers offered at the start of the pandemic and is a reflection of the driving behaviors of Americans at large in 2020.

While rates are down this year, drivers still pay $289 (24%) more annually than they did in 2011. In that time, rates have increased as much as 80% in 44 states and Washington, D.C., while six states saw rate decreases of up to 20% and one (Delaware) stayed the same.

Prices Vary Down to the ZIP Code
In the past year, car insurance rates fell in 32 states and rose in 17 states and Washington D.C. Maine saw the biggest rate increase at 18% year-over-year. Michigan - the previous and current most expensive state for car insurance - had the biggest decrease at 18% due to sweeping legislative changes.

Most Expensive States:

  • Michigan: $2,535
  • Florida: $2,324
  • Louisiana: $2,304

Most Expensive Cities:

  • Detroit, MI: $5,072
  • New Orleans, LA: $3,564
  • New York, NY: $3,110

 

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