Car insurance prices are rising across the U.S., with the biggest increase since last summer occurring in Minnesota.
According to Insurify, one of the largest online insurance shopping networks, the country could see a 22% increase by the end of the year, and in Minnesota the increase could be as high as 61%.
One of the main reasons for the increase was severe weather – more specifically, a storm with heavy hail on August 11, 2023.
“(The storm had) golf ball to baseball sized hailstones that basically wreaked havoc everywhere (in the area) and caused nearly $2 billion in damage alone,” said Chase Gardner, data insights manager at Insurify, of last summer’s storm.
Another factor leading to higher premiums, according to Gardner, is the increasing insurance fraud in car insurance.
“We’ve seen some pretty dramatic results over the last six and 18 months,” Gardner added.
According to Insurify, the average cost for a Minnesota resident to have comprehensive car insurance in June 2023 was $1,492; last month, that amount rose to an average of $2,315.
For this reason, local insurance brokers are busier than usual.
“We’re hearing from a lot of consumers who are just shopping around,” said Aaron Sorenson, executive vice president at Insurance Brokers of Minnesota.
Sorenson said the higher prices are also due to faster drivers, adding that the higher speeds have led to more serious and costly accidents.
“They’ve been with one of the major insurers, the captive market, for years, and they’re just tired of having to accept these price increases over and over again,” Sorenson said of his customers.
Sorenson knows the markets well and says they sometimes direct their clients to smaller, family-owned businesses that may not be as well known.
“Maybe the ‘Ducks’ or ‘Flippers’ aren’t on TV as much anymore, (but) they’re taking some of those savings, the advertising savings, and adding it to their rates,” Sorenson said.
