Why Massachusetts auto insurance rates increase

Updated May 3, 2024 | Published February 24, 2023

Auto Insurance
For Drivers

According to Forbes, car insurance rates will once again increase in 2024. In 2023, car insurance premiums rose about 20% on average. The exact rate change varies by insurance carrier, but with car insurance rates significantly increasing across the industry, combined with certain nationwide trends, it’s safe to say that there will be rate increases yet again in 2024.

Nationwide trends

Inflation

Inflation has been a driving factor in car insurance rates increasing for several years now and has the potential to still be a factor this year. Expect car insurance rates to continue to increase at a similar pace to inflation, for insurance companies to keep up with higher costs.

Increasing medical costs

According to a report from ACPIA, the average bodily injury claim cost has increased by 40% from 2018 to 2022. The cost for medical and hospital services has outpaced the rate of overall inflation from that period. As a result, insurance companies need to pay out more for bodily injury liability claims, and car insurance premiums will rise more as a result.

Personal factors

While trends in the auto industry and auto insurance rates may be out of your control, there are things within your control that factor into the price of your auto insurance premium.

Change in your driving record

Accidents may be the most common incident to negatively affect your driving record*, but there are other incidents that are within your control. Speeding violations, reckless driving, and driving while intoxicated can increase premiums, or even cause your insurance company to cancel your policy. If you’ve filed a claim in the past few years, you also might see your insurance premium increase for three years following the claim’s occurrence. It’s always a good idea to do your best to remain on guard while driving, and maintain good, defensive driving habits.

*Note: At-fault accidents are not the only time you could see your insurance premiums increase. Your premium can increase after an accident where there is no fault.

Changes in your credit score

Your personal insurance is combined with several other factors to determine your home and auto insurance premium. Your credit score affects your personal insurance score. Any significant changes in your credit score from year to year can have a great effect on your insurance premiums. For tips on improving your credit score, check out this article from our parent company Webster First Federal Credit Union: How to Bring Your Credit Score Up.

How much you drive

The more you drive, the higher risk you will be to get into an accident. Let your car insurance company know if your lifestyle changes and you’re driving less, such as a switch to full or part-time remote work, because you may be eligible for lower rates.

The car you drive

Generally, a new car costs more to repair after an accident. New cars are also at a higher risk of break-ins and theft. Keep in mind though that luxury cars aren’t the only ones that are at a high-risk of theft. Thieves also target cars with high-demand parts.

Adding a driver to your policy

If you have other drivers named on your policy, or add new driver to your policy, their personal factors as listed above will also affect your auto insurance rates. Adding a teenage driver generally bumps your rate up, due to the high risk associated with new drivers. If you’re planning to insure your teen driver, be sure to look for Good Student Discounts. If they have a GPA of a B or better, they may qualify.

Statistics where you live

Insurance companies take factors beyond car and personal driving habits into account when determining your rate. For instance, the following location-based factors can cause your insurance rate to increase for seemingly no reason at all:

Crime rate
Increased accidents in your area
More uninsured and underinsured drivers on the road in your area
Insurance fraud
Increased natural disasters

A change in applicable discounts

Everybody loves a discount. Each year, you may become eligible or ineligible for a discount depending on a variety of factors such as if you bundle home and auto, membership in groups like AARP, and good driver discounts, among others. For example, an introductory discount offered for the first year of your policy may expire, which would increase your rates. But, perhaps you switched to electronic statements, making you eligible for a different discount.