The real cost of car insurance is how much of the average family’s income they spend on a full-coverage policy every year. Nationally, full coverage car insurance costs an average of $2,014 per year. The national average annual income is $68,852, according to data from the U. S. Census Bureau. This means that, nationally, drivers spend an average of 2. 93 percent of their income on car insurance in 2023. This is up from 2. 57 percent in 2022, which is no surprise, given the rapid inflation the country experienced last year.
At Bankrate, we strive to help you make smarter financial decisions. We have licensed insurance professionals on staff who have worked in the auto, home, and life insurance industries for a total of 47 years. They can help readers understand how insurance affects their finances. While we adhere to strict ,this post may contain references to products from our partners. Heres an explanation of . Our content is backed by Coverage. com, LLC, a licensed entity (NPN: 19966249). For more information, please see our . Bankrate logo.
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve kept this reputation for more than 40 years by making it easier for people to make financial decisions and giving them confidence in what to do next.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our content is written by professionals with a lot of experience and is edited by experts in the field to make sure it is fair, correct, and reliable.
Our insurance team is composed of agents, data analysts, and customers like you. They focus on what customers care about most—price, customer service, policy features, and chances to save money—so you can be sure that the provider you choose is the right one for you.
All providers discussed on our site are vetted based on the value they provide. And we constantly review our criteria to ensure we’re putting accuracy first. Bankrate logo.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
We value your trust. We want to give readers information that is both correct and fair, and we have editorial standards in place to make sure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Bankrate’s editorial team writes on behalf of YOU — the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. That way, you know that the information you’re reading, whether it’s an article or a review, is reliable. Bankrate logo.
Massachusetts drivers are facing significant auto insurance rate hikes for 2023, with some customers reporting increases of 40-60% compared to their 2022 premiums. After years of relatively stable or even decreasing rates, these sudden spikes come as an unwelcome surprise for many. Analyzing the key factors causing the rate hikes can help drivers better understand the reasons behind the jumps and make smart choices to offset the higher costs.
Key Factors Leading to Rate Increases
Several major factors are converging to drive up Massachusetts car insurance rates for 2023:
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Increased repair costs – The costs to repair today’s high-tech cars with advanced safety features, specialized parts, and complex components has risen sharply. This gets passed along to consumers through higher premiums.
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Pandemic impacts – Lower driving and claims during COVID-19 lockdowns caused many insurers to reduce rates. With driving patterns normalizing again, claims are up and so are rates
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Inflation – Rising prices across the entire economy include higher costs for auto parts, labor at repair shops, medical care, and insurance company operations. Insurers are raising rates to compensate.
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More accidents – With roads busier again, accidents are inevitable. This results in more claims paid out by insurance companies, necessitating premium increases.
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Tech advances – New vehicle technologies like advanced driver assistance systems, cameras, and sensors are more costly to repair after crashes
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Repair labor shortages – A tight job market makes it harder for body shops to hire enough qualified technicians, resulting in higher labor rates.
Average Statewide Premium Increase
Industry data shows the average car insurance premium increase in Massachusetts from 2022 to 2023 is around 10%. However, many drivers are seeing much larger hikes:
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Geico – Up to 42% increase
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Allstate – Up to 16% increase
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Liberty Mutual – Up to 12% increase
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Progressive – Up to 10% increase
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State Farm – Up to 8% increase
Actual increases depend on individual driving history, vehicle, coverage, and other factors. Competitive shopping is key to getting the lowest available rate.
Steps to Offset Rate Increases
While the rate hikes seem dramatic, Massachusetts drivers can take proactive steps to reduce the impact on their wallets:
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Shop around – Compare quotes from multiple insurers to find the best price. Loyalty rarely pays off.
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Raise deductibles – Opting for higher deductibles like $500 or $1000 can lower premiums substantially.
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Drop extra coverages – Analyze needs to see if comprehensive or collision coverage can be dropped on older cars.
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Enroll in usage-based programs – Insurers offer discounts for sharing driving data that shows safe habits.
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Qualify for discounts – Take defensive driving courses, maintain good credit, insure home along with car, and reduce mileage to get the max discounts.
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Modify coverage – Review policy limits and exclusions to see if there’s room to cut while still being properly covered.
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Maintain good driving record – Speeding tickets, accidents, and violations will drive premiums up further. Drive safely and cautiously.
Adding Teen Drivers Gets More Costly
Parents adding teenage drivers to their policies will feel the rate hikes acutely. Premiums for full coverage already rise steeply for newly licensed teens, averaging around $3,400 annually in Massachusetts according to 2021 data.
With across-the-board increases for 2023, parents can expect to pay roughly $700 more per year to insure teen drivers. Steps like taking defensive driving courses, maintaining strong grades, driving older cars, and limiting mileage can help control costs.
Massachusetts Auto Insurance Requirements
Despite the rate increases, Massachusetts drivers must continue carrying the state minimum required auto insurance coverages:
- $20,000 bodily injury per person
- $40,000 bodily injury per accident
- $5,000 property damage liability
- $20,000 uninsured motorist bodily injury
- $5,000 personal injury protection (PIP)
- $5,000 medical payments
Failing to maintain continuous auto insurance coverage results in heavy fines and license suspensions. Drivers should not drop coverage hoping to save money.
Long Term Outlook for Premiums
Industry analysts expect car insurance rates to keep trending upward both in Massachusetts and nationwide over the next few years. However, there are some positive signs:
- Used car prices are expected to fall as supply chain issues resolve, lowering replacement costs.
- Newer cars have more crash-avoidance safety features, which could gradually reduce accident frequency.
- insurers are using advanced data analytics to better segment risk pools and price policies competitively.
Barring any new unforeseen disruptions, the rate of increases should start to moderate within the next 2-3 years. But much depends on inflation and other macro-economic factors outside the insurance industry’s control.
Tips for Finding the Best Rate in 2023
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Compare quotes from at least 5 insurers to find the lowest premium.
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Ask about all available discounts you may qualify for to maximize savings.
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Opt for higher deductibles if you can afford the out-of-pocket risk.
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Drop unnecessary add-on coverages like rental reimbursement or roadside assistance.
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Take advantage of telematics programs to get discounts for safe driving habits.
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If your car is older, consider dropping collision and/or comprehensive coverage.
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Review your policy limits and exclusions closely and adjust if feasible to lower premiums while retaining adequate protection.
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Check insurer ratings on sites like A.M. Best to be sure you choose a financially stable provider.
Key Takeaways
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Auto insurance rates are spiking significantly across Massachusetts for 2023, with average increases around 10% but some drivers seeing hikes of 40% or more.
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Multiple factors are causing the increases, including higher accident rates, repair costs, inflationary pressures, and normalizing driving patterns post-pandemic.
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While frustrating, drivers can take proactive steps to offset the impact by shopping around, altering coverage, earning discounts, and driving safely.
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Adding teens to policies will be markedly more expensive with the across-the-board rate hikes.
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Premiums should start to stabilize over the next few years if claim trends improve and inflation eases. But expect rates to keep trending upward for now.
While steeper bills are never welcome, Massachusetts motorists can manage the rising insurance costs through smart shopping and policy choices. Comparing options will be more important than ever in 2023.
HighlightsNationally, drivers spend nearly 3 percent of their annual income insuring their cars on average. Drivers in New York, which has the highest true cost of auto insurance in the country according to our study, spend even more, doling out more than 5 percent of their annual income to insure their cars. Maine drivers, who enjoy the lowest true cost of car insurance in 2023, spend just over 1 percent of their income on car insurance. SECTION
| State | True Cost ranking | Average annual premium | Premium change vs. 2022 |
|---|---|---|---|
| Alabama | 31 | $1,843 | $83 |
| Alaska | 46 | $1,946 | $260 |
| Arizona | 15 | $1,810 | $67 |
| Arkansas | 23 | $1,907 | $101 |
| California | 32 | $2,291 | $101 |
| Colorado | 37 | $2,121 | $102 |
| Connecticut | 5 | $1,553 | $20 |
| Delaware | 42 | $2,103 | $140 |
| Florida | 49 | $3,183 | $421 |
| Georgia | 24 | $2,085 | $100 |
| Hawaii | 10 | $1,275 | $69 |
| Idaho | 4 | $1,133 | $68 |
| Illinois | 34 | $1,806 | $258 |
| Indiana | 8 | $1,295 | $53 |
| Iowa | 9 | $1,315 | $61 |
| Kansas | 41 | $1,878 | $76 |
| Kentucky | 47 | $2,124 | $170 |
| Louisiana | 48 | $2,909 | $45 |
| Maine | 1 | $941 | $65 |
| Maryland | 17 | $1,971 | $40 |
| Massachusetts | 11 | $1,262 | $-34 |
| Michigan | 44 | $2,691 | $346 |
| Minnesota | 45 | $1,760 | $68 |
| Mississippi | 33 | $1,771 | $70 |
| Missouri | 40 | $1,943 | $82 |
| Montana | 36 | $1,889 | $94 |
| Nebraska | 26 | $1,624 | $86 |
| Nevada | 43 | $2,779 | $353 |
| New Hampshire | 3 | $1,262 | $80 |
| New Jersey | 38 | $1,754 | $-137 |
| New Mexico | 12 | $1,591 | $102 |
| New York | 50 | $3,139 | $143 |
| North Carolina | 19 | $1,446 | $54 |
| North Dakota | 14 | $1,302 | $77 |
| Ohio | 20 | $1,266 | $66 |
| Oklahoma | 35 | $1,998 | $96 |
| Oregon | 13 | $1,415 | $44 |
| Pennsylvania | 29 | $2,040 | $38 |
| Rhode Island | 39 | $1,886 | $39 |
| South Carolina | 25 | $1,532 | $68 |
| South Dakota | 28 | $1,553 | $11 |
| Tennessee | 16 | $1,429 | $46 |
| Texas | 27 | $2,019 | $151 |
| Utah | 18 | $1,510 | $61 |
| Vermont | 2 | $1,061 | $61 |
| Virginia | 6 | $1,439 | $99 |
| Washington | 30 | $1,410 | $97 |
| West Virginia | 22 | $1,580 | $53 |
| Wisconsin | 7 | $1,292 | $43 |
| Wyoming | 21 | $1,582 | $72 |
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The real cost of car insurance is how much of the average family’s income they spend on a full-coverage policy every year. Nationally, full coverage car insurance costs an average of $2,014 per year. The national average annual income is $68,852, according to data from the U. S. Census Bureau. This means that, nationally, drivers spend an average of 2. 93 percent of their income on car insurance in 2023. This is up from 2. 57 percent in 2022, which is no surprise, given the rapid inflation the country experienced last year.
At Bankrate, we strive to help you make smarter financial decisions. To help readers understand how insurance affects their finances, we have licensed insurance professionals on staff who have spent a combined 47 years in the auto, home and life insurance industries. While we adhere to strict ,this post may contain references to products from our partners. Heres an explanation of .Our content is backed by Coverage.com, LLC, a licensed entity (NPN: 19966249). For more information, please see our . Bankrate logo
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve kept this reputation for more than 40 years by making it easier for people to make financial decisions and giving them confidence in what to do next.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our content is written by professionals with a lot of experience and is edited by experts in the field to make sure it is fair, correct, and reliable.
Our insurance team is composed of agents, data analysts, and customers like you. They focus on what customers care about most—price, customer service, policy features, and chances to save money—so you can be sure that the provider you choose is the right one for you.
- We help you with your search and explain the different types of coverage you can get.
- We give you accurate, up-to-date market data to help you make smart choices.
- We cut down on industry slang so that you can get the clearest information possible.
All providers discussed on our site are vetted based on the value they provide. And we constantly review our criteria to ensure we’re putting accuracy first. Bankrate logo.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
We value your trust. We want to give readers information that is both correct and fair, and we have editorial standards in place to make sure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Bankrate’s editorial team writes on behalf of YOU — the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. That way, you know that the information you’re reading, whether it’s an article or a review, is reliable. Bankrate logo.
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We are always working to give our customers the expert advice and tools they need to be financially successful throughout their lives.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
Because we’re open about how we make money, you can see how we can offer you good content, low prices, and useful tools.
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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve kept this reputation for more than 40 years by making it easier for people to make financial decisions and giving them confidence in what to do next.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our content is written by professionals with a lot of experience and is edited by experts in the field to make sure it is fair, correct, and reliable.
Our insurance team is composed of agents, data analysts, and customers like you. They focus on what customers care about most—price, customer service, policy features, and chances to save money—so you can be sure that the provider you choose is the right one for you.
- We help you with your search and explain the different types of coverage you can get.
- We give you accurate, up-to-date market data to help you make smart choices.
- We cut down on industry slang so that you can get the clearest information possible.
All providers discussed on our site are vetted based on the value they provide. And we constantly review our criteria to ensure we’re putting accuracy first.
for full coverage insurance
PERCENT OF INCOME SPENT
on full coverage insurance
highest percentage of income spent on car insurance
lowest percentage of income spent on car insurance
Why did auto insurance rates increase?
FAQ
How much did car insurance go up in 2023 in Massachusetts?
Are insurance premiums going up in 2023?
Why are car insurance rates going up in MA?
Why did GEICO rates go up 2023?
Are auto insurance rates up in Massachusetts in 2024?
Auto insurance rates in Massachusetts are up for 2024, with some folks reporting rate increases of as much as 60 percent over 2023 rates. My wife and I insure with Geico. We experienced a 40 percent increase. One main reason insurance costs are up so dramatically is that it costs more to repair today’s cars.
Are car and auto insurance rates going up in Massachusetts?
Car and auto insurance rates in Massachusetts and other states are way up. Here’s why you’re paying more Updated on: December 1, 2023 / 6:15 AM EST / CBS Boston BOSTON – Car and auto insurance bills are going up across Massachusetts and the country and they’re a lot higher than some drivers expected.
Will car insurance rates increase in 2023?
Drivers with a traffic violation or accident could see an average car insurance rate increase of 52% in 2023. North Carolina has the largest average increase (115%) in full coverage auto insurance rates for drivers with a ticket, accident or DUI on their driving record.
How much does car insurance cost in 2023?
Lower your auto insurance costs: Find the best car insurance of 2023 ◾ Florida: $3,945 ◾ New York: $3,840 ◾ Louisiana: $3,618 The states where people are spending the largest percentage of their income on car insurance, or what Bankrate calls the “true cost,” are: ◾ Louisiana at 6.53%, up 1.76% from 2023 ◾ Florida at 5.69%, up 0.79%