Julie Rowley seems like someone who would get a good deal on car insurance. She’s 57, lives in Washington Heights and drives a modest car (a 2013 Honda Civic EX). She hasn’t had a claim since the 1980s, when she worked for American TV in Madison and the store chain’s owner, Crazy TV Lenny, ran into her car.
But in June, Rowley was notified that her six-month premium would increase by $121 in September. That’s on top of a $94 increase in March. If she keeps her coverage, Rowley’s six-month premium will be $663 – 50% higher than she paid a year earlier. “It doesn’t seem like I can get a break,” she says.
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Maybe Rowley can take consolation in knowing she’s paying less than many Wisconsin drivers. On an annual basis, the average premium in Wisconsin is $1,718, up 33% from $1,292 in 2023, according to Bankrate. That’s on top of a 39% increase from 2022 to 2023, according to MarketWatch.
The increases are “somewhat unprecedented,” says Andrew Franken, president of the Wisconsin Insurance Alliance trade group.
Key factors include the COVID-19 pandemic, technology and reckless driving. Supply chain problems coming out of the pandemic led to price increases on vehicle parts and delays of weeks or more in repairs, which in turn caused motorists to use the rental car provision in their insurance policies. “There were these additional costs that the insurance companies had not historically had to bear at that severity or for that period of time,” says Sarah Smith, spokesperson for the state Office of the Commissioner of Insurance.
Technological advancements have made repairs more costly. “You used to be able to replace a bumper,” Franken says. “Now you’ve got cameras, you’ve got diagnostics, and so it’s been challenging and expensive.”
Bad driving is another factor. Speeding and reckless driving, on the rise since the pandemic, according to Smith, make accidents more likely.
Franken sees indications that rates might have hit a plateau. But they may stay high for a while.
“Insurers are passing on increasing costs to policyholders, and that will continue as long as their own costs increase,” says Daniel Bauer, risk and insurance professor at the UW-Madison School of Business.
If there’s good news, it’s that car insurance is relatively inexpensive in Wisconsin. Wisconsin ranks 15th-lowest among the states on Bankrate’s “true cost” measure – the percentage of household income spent on an annual full coverage car insurance policy.
Rowley says she’ll keep looking for ways to pay less, which is what Franken advises. “The answer still is, call an agent, shop around and find the best deal, because people save money,” he says.
