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Car insurance rates expected to rise 8.4 percent in 2023

Posted at 6:15 PM, Jan 18, 2023

CORPUS CHRISTI, Texas — As insurance renewals roll back around this year, drivers can expect to pay a little more for their car insurance.

According to a new report by ValuePenguin, drivers can expect car insurance rates to rise 8.4 percent across the U.S. in 2023.

The report states it is the largest rate increase in six years.

The average cost of full coverage car insurance is expected to be over $1,780 per year, but rates will vary between states.

In Texas, the average rate could climb to more than $1,875 per year.

This is a concern for Lisa Hodges, who has two teenagers who will be driving this year.

"I’m very nervous about how much our bill is going to be," Hodges said. "I’ve got a 15-year-old and a 17-year-old that are both taking driver’s ed and I expect our insurance rate to probably double because they’re boys and they’re teenagers. Everything is out of control."

But what's driving this outrageous price jump?

Experts said increased driving patterns similar to pre-pandemic life is one reason. As many people get back on the road, they're headed to work, school and traveling with family.

They said this means more accidents and a higher volume of claims,and that raises insurance rates.

Other reasons include the cost of car repairs due to supply chain issues impacting auto parts, worker shortages add labor costs, and a raise in medical costs from accident-related injuries that insurance companies have to pay.

Normally, a car insurance rate may increase based on a person's driving background. But what about the people with a clean driving record?

“I’m a professional driver, so I have to keep an impeccable driving record," Cynthia Featherstein said. "It doesn’t give me any kind of discount of anything like that, it just keeps going up.”

Featherstein said she's seen a $400 increase to her car insurance since her last renewal.

Government data shows the price of a new car has surged nearly 8 percent in the past year.

The hope for drivers is that the financial paint doesn't last.

For now, experts said insurance rates may decrease as inflation slows in the coming years, but nothing is guaranteed.

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