Auto Insurance in a Post-Pandemic World

For nearly a decade, car insurance premiums have steadily increased1. That has changed in 2021, as pandemic stay-at-home orders resulted in fewer insurance claims overall. Insurance premiums dropped slightly — but not for all drivers.

The pandemic also changed the ways that some insurance companies analyze risks. The takeaway: To keep premiums low, consumers need to compare quotes carefully. Insuraroo’s data-driven comparison tools can help.

Unfortunately, car insurance is still an expensive purchase.

Some insurance companies gave customers credits and offered payment relief during the first months of the pandemic. Those rebates helped to ease premium burdens for some drivers, but not all policyholders benefited.
According to one estimate from the American Automobile Association (AAA), the average premium for medium sedans was about $1,245 in 2020.
Other estimates put the average cost of full coverage at over $1,650 per year2. Because insurance providers use dozens of factors to determine premium costs, finding the average cost of auto insurance can be difficult.
Drivers who shop around in 2021 can often save by taking advantage of differences in premium calculations. Unfortunately, many consumers skip this crucial step.

Factors That Affect Auto Insurance Rates in 2021

Post-Pandemic Concerns - The pandemic changed insurance actuarial practices overnight; consumers were suddenly driving less, and many insurers saw significant losses in the first months of 20207.

In 2021, companies will look for ways to learn the lessons of the pandemic, which may mean offering additional customization options for policies.

Your Location - Where you park your vehicle matters. Insurance companies will look at accident statistics in your zip code. State laws also affect the ways that insurance companies calculate their rates.

Your Vehicle - More expensive vehicles are more likely to submit an expensive claim, so if you drive a luxury vehicle, expect higher rates for comprehensive and collision coverage. A Tesla Model X costs an average of $1,909 per year to insure4 — well over the national average.

Your Driving Record - Depending on your insurer, a single accident or ticket could cause rates to skyrocket.

How Much You Drive - If your insurer offers discounts for low mileage vehicles, you may be able to reduce your costs (and if your insurance company doesn’t offer this discount, that’s another great reason to shop around).

Your Age and Gender - Younger drivers tend to submit more insurance claims, and women tend to be safer drivers than men

Some State Laws Are Changing in 2021

Michigan no longer requires drivers to purchase unlimited personal injury protection medical coverage5.
In Florida, major legislation is expected to eliminate the state’s unique “no-fault" insurance system. Drivers can expect significantly lower rates — but they’ll need to compare insurance providers while navigating the new insurance laws.
In 2019, California prohibited insurance companies from considering gender when calculating rates.
Most other states aren’t making major changes to their insurance laws, but drivers should research for themselves.

So, how can drivers keep their insurance premiums low in 2021?

As the insurance industry addresses the realities of the post-pandemic world, many are changing the ways they calculate rates.

A single search could lead to hundreds of dollars in savings per year — without raising deductibles or reducing coverage limits.

Insuraroo makes insurance comparison easier and more secure. Our data-enhanced tools collect basic information, then source quotes from reputable providers.

Whether you’ve had the same policy for years or you’re buying insurance for the first time, it’s important to compare before you buy. Dozens of factors influence insurance costs, but a quick search can allow you to hit the road with peace of mind (and more money in your wallet).