Why auto insurance rates are going up

Reasons behind rising car insurance premiums and ways to help manage them.

A man driving his car

With prices on the rise due to inflation, auto insurance rates have also been affected. Throughout the insurance industry, vehicle insurance rates are increasing by an average of 4.9%. Here are a few reasons why auto insurance rates are going up, along with what you can do to help manage your rates.

Some reasons for an auto insurance rate increase

Rising repair costs

Parking sensors, lane-departure warnings, and even stronger materials are now widely available on many vehicles. While those smarter sensors and stronger devices can help improve safety, they are also more expensive to repair. Supply chain issues have also impacted repair costs and, on occasion, how quickly you can get repairs completed. Also, with new technology being put into vehicles, it can increase prices when it comes to things like electric car insurance.

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Increased accidents due to distracted driving

According to a State Farm® survey, more than half of drivers said they read or send texts while driving, and one-third of drivers reported using video chat or recording video. Even voice-activated car commands can divert cognitive abilities and attention. Rethink using the phone while driving, and resist being tempted by other driving distractions. If you have a teen, be sure to talk with them about safe driving habits. Especially since teenagers make up a large portion of distracted drivers involved in fatal crashes.

Auto insurance rate increases by state

Rising car insurance premiums can vary by location, due to differences in state laws and the city you live in. For example, some of the states with the cheapest car insurance are Iowa, South Dakota, Wisconsin, North Dakota and Wyoming. While some states such as Michigan, Florida, Rhode Island, Delaware and Nevada tend to have the highest car insurance rates.

Ways to manage the rate increase

A Personal Price Plan™ helps you create an affordable price (just for you). 1 Check with your State Farm agent about possible ways to save on your bill.


1 Prices are based on rating plans that vary by state. Coverage options are selected by the customer, and availability and eligibility may vary.

Discounts may exceed 30% and vary state-to-state (NY capped at 30%). Not available in CA, MA, RI. A discount may not be available in NC depending on individual facts and circumstances. Setup required.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

State Farm Mutual Automobile Insurance Company
State Farm Indemnity Company
Bloomington, IL

State Farm County Mutual Insurance Company of Texas
Richardson, TX

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