Car insurance prices are on the rise across the United States, with Minnesota experiencing the steepest increase compared to last summer. According to Insurify, a leading online insurance shopping network, the nation could see a 22% increase in car insurance prices by the end of the year, while Minnesota’s increase could be as high as 61%.
One of the main reasons for this spike in car insurance prices is severe weather events, particularly a storm that produced large hail on August 11, 2023. Chase Gardner, data insights manager with Insurify, highlighted the impact of this storm, stating that it caused nearly $2 billion in damages alone. The aftermath of such severe weather events often leads to insurance companies raising their premiums to cover the increased risk of claims.
Another contributing factor to the rise in car insurance prices is the prevalence of car insurance fraud. Gardner noted that fraudulent claims have become more common in recent months, leading to higher costs for insurers, which are then passed on to consumers in the form of increased premiums.
Insurify reported that the average cost for full coverage car insurance in Minnesota was $1,492 in June 2023. However, by last month, that figure had jumped to an average of $2,315. This significant increase in premiums has left many Minnesotans seeking more affordable insurance options.
Local insurance brokers have seen a surge in inquiries from consumers looking to save money on their car insurance. Aaron Sorenson, executive vice president of Insurance Brokers of Minnesota, noted that many clients are shopping around for better rates due to the recent price hikes. Sorenson also mentioned that higher speeds and more severe crashes have contributed to the rising cost of car insurance in the state.
In response to the escalating prices, some insurance brokers are recommending their clients switch to smaller, lesser-known insurance companies that may offer more competitive rates. These smaller companies may not have the same level of brand recognition as larger carriers but can often provide savings by allocating their advertising budget towards lower premiums.
As car insurance prices continue to spike across the US, it is essential for consumers to be proactive in seeking out the best insurance options for their needs. By comparing quotes from multiple providers and considering alternative insurance companies, drivers in Minnesota and beyond can potentially save money on their car insurance premiums despite the current market trends.