Philly will see increase in car insurance rates, per Bankrate
The cost of car insurance in the Philadelphia region is up about 21% compared to last year.
An annual report released this month from Bankrate, a consumer financial services company, says car insurance rates in the Philadelphia area will jump about 21%.
On average, Philly drivers are spending $4,753 on their annual car premium, 5.65% of their household income.
Nationally, the average cost of full-coverage car insurance has increased 26% since last year, according to the report.
“Almost every state except for one had massive rate increases,” said Shannon Martin, a Bankrate analyst. “It’s just really huge at a time when people are struggling so much.”
This year, the average cost of full-coverage car insurance nationwide is $2,543 annually, up $529 from last year.
The report looked at rates for 2024 in all 50 states and Washington, D.C., and used median annual household income data from the U.S. Census Bureau from 2022. The rates analyzed by Bankrate were based on 40-year-old drivers with good credit and driving records, and weighted to account for population density.
Why the large increase?
Insurance premiums are, for the most part, reactionary, Martin said, and a lot has happened in the last few years that has affected rates including inflation, an increase in the price of car parts, more fatalities when people got back on the road in 2021, and refunds insurance companies issued customers during the pandemic.
“Usually, one or two things happen and rates can adjust here and there, but this was just almost every aspect of car insurance changing in a couple of years,” she said.
Now insurers are trying to recover losses and assess how to accurately price rates for the future with extreme weather conditions seemingly increasing in frequency, with the potential to cause a lot of damage, she said.
Consumers in the Philadelphia area say they have felt the increase in rates recently. One driver in Delaware County was quoted nearly 100% more than what they were previously paying, according to a recent Inquirer report.
Why you need car insurance
Pennsylvania law requires all motor vehicle owners to maintain vehicle liability insurance on registered vehicles. If an uninsured driver is involved in an accident and injures another driver, that can impact a family who doesn’t have a way to collect on medical payments, Martin said.
“I am really concerned because uninsured driving is one of those factors that impacts everyone,” she said. “Some people they just let the policy lapse, and you never want to have that happen.”
Driving without insurance can also result in increased costs when getting insurance again.
How to lower your car insurance
Shannon recommends a few steps to decrease car insurance costs:
Make sure your policy is up to date, including your job, address, and how many children reside in your house.
Ask your agent about available discounts. Drivers who are eligible can take a defensive driving course and receive a discount. Students who keep up a 3.0 GPA or higher can get a good student discount.
Remove coverage you don’t need instead of letting insurance lapse.
Keep a good credit score or improve it.
Research insurance costs before purchasing a car, so it’s not a surprise.
When a teen in the household begins to drive, add them to a car insurance policy with another primary driver on the insurance, instead of having them have their own car, to reduce the cost.
Editor’s note: A previous version of this story erroneously cited data that said the Philadelphia area had the largest increase in car insurance among the cities studied. The Inquirer has since learned this data was inaccurate. Bankrate has issued a correction and this story has been updated.