Insurance Rates Make Driving Unaffordable

Feb 12, 2024

A new study found that car insurance rates have increased 26% across the U.S. over the last year—and more than 50% from two years ago. The average cost of car insurance in the U.S. is now at 2,543 dollars a year and, in some cities, much higher than that. Detroit is the undisputed leader with $5,687 per year, while the runner-up, Philadelphia with $4,753, saw a whopping 150% increase from last year.

So, even if you can somehow afford to buy a car these days, you can’t afford the insurance. And state regulators across the country have been approving the rate hikes insurers propose, no matter how obscene. The top ten auto insurers all got premium increases of 20% or more approved. In Texas, insurance premiums shot up close to 50% over the last two years.

Not surprisingly, insurance companies’ profits and stock prices are through the roof. Progressive and Travelers reported record-breaking profits last year and said more rate increases are coming. Allstate’s shares have gone up more than 50% since last summer, while the value of total Progressive stock surpassed 100 BILLION dollars.

Of course, the insurance companies come up with all kinds of reasons for the premium hikes—such as paying more for claims due to natural disasters or rising crime. But the truth is, they don’t lower premiums when they make super-high profits, as they are doing now. They just pass all that money on to their shareholders.

No, the insurance companies are simply price-gouging because they can—because state politicians, who are supposed to prevent such a rip-off through regulation, actually aid and abet it. The result is that, given the exorbitant car prices plus sky-high insurance rates, driving is becoming unaffordable to more and more people in the U.S.—even while it is the only option for millions of American workers to get to work.