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Consumer Price Index (CPI) data from December 2023 to December 2024 showed that the cost of motor vehicle insurance increased 11.3% nationwide, second only to the rising price of eggs. At the end of 2024, State Farm announced that it would raise rates by 17.7% in California for personal auto insurance, according to Consumer Watchdog. This was following a 21% increase in February 2024.
Even though I don't live in California, I have State Farm auto insurance, so I paid attention when I heard about the price increases. When I recently renewed my auto insurance policy, I noticed a fairly substantial price increase. I didn't have any recent claims or changes in coverage, so it left me wondering why my State Farm car insurance went up.
Several factors can increase your premiums, including rising vehicle repair costs, resulting from supply chain issues and labor shortages. However, other factors — such as your driving record, location, age, and annual mileage — can also affect State Farm car insurance costs.
Key Takeaways
- State Farm car insurance in California increased by 17.7% at the end of 2024.
- You'll pay more for car insurance if you have an at-fault accident on your driving record.
- The price of car insurance for all carriers increased due to labor shortages and rising material costs.
- Your State Farm premiums can also go up due to changes to your vehicle, policy features, and covered drivers.
Why did my State Farm car insurance go up?
Although State Farm customers may particularly feel concerned about how much they're paying for car insurance, premiums in general have been increasing, no matter which auto insurance company you use. Here are several common factors that influence the price of your auto policy.
Economic factors
One of the biggest factors making car insurance rates rise without an accident is inflation. The last few years of higher inflation have increased the cost of nearly everything, including new and used vehicles, parts, and labor. This has made cars significantly more expensive to repair or replace after an accident.
The CPI, a key indicator of inflation, showed that the price of auto parts rose by around 18% between March 2020 and March 2025, increasing from 148.19 to 181.89 points. According to USA Facts, car insurance prices increased by 53.7% between 2020 and 2024 due to inflation.
Additionally, supply chain issues increased the demand for both new and used vehicles and vehicle parts, leading to higher prices. Similarly, recent and upcoming import tariffs on auto parts have made vehicle repairs more expensive and will likely make parts harder to obtain, further increasing the cost of materials.
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Vehicle and typical use
The insured vehicles and their typical usage are factors affecting car insurance rates, so you may see cost hikes despite having a clean driving record. If you've recently added a new car, especially one that is electric or has the latest technology, you might pay more for insurance.
The U.S. Energy Information Administration reported that electric and hybrid vehicles accounted for 16% of light-duty car sales in the United States in 2023, compared to 12.9% in 2022. While this is beneficial for the environment, electric vehicles are more expensive to repair or replace than conventional cars, which can result in higher insurance rates.
Most new cars come equipped with technology features, such as parking sensors, lane departure warnings, and improved batteries, which can also contribute to the rising cost of insurance. These features are more expensive to fix after an accident.
Similarly, if you've started driving more than you have in recent years, you might see a rise in your premiums. More time spent on the road means a higher chance of an accident and a potentially higher auto insurance rate.
Coverage options
The more coverage you have on your car, the more you'll typically pay for car insurance. If you increase your policy limits or add specialty car insurance coverage, like glass or general asset protection (GAP) insurance, expect to pay more.
The same applies if you lower your deductible, which is the amount paid out of pocket after an accident before your insurance kicks in. Raising your deductible is generally a good way to save money on car insurance. However, lowering it means you'll likely see your rate increase, since the insurer now bears a greater financial responsibility for repairing your car after an accident.
Additionally, you may pay more if your insurer offers new car replacement coverage, which provides a replacement vehicle of the same model year if yours is totaled.
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Driving record and claims
Accidents, distracted driving, and moving violations (like speeding tickets or driving under the influence) are among the primary reasons for rate increases. This is true whether you have insurance through State Farm or another car insurance company.
While the exact amount varies based on the specific violation and your individual situation, you'll likely see a significant increase after an at-fault accident. In addition to your premiums increasing, you may lose any safe driving discounts you had previously qualified for.
For instance, if you use State Farm's Drive Safe and Save telematics program and are in an accident, you could lose a discount between 10% and 30%. You may also lose other discounts, such as going three years or more without an accident or completing a defensive driving course.
Driver and location changes
Another factor that may increase your insurance premiums is adding a new driver to your policy. While adding an adult driver probably won't significantly increase your rates, adding a young driver can mean substantial increases. Each company varies, but drivers between the ages of 16 and 25 typically pay more for auto coverage than those between the ages of 25 and 65.
Similarly, if you move to a more populated area, like from a rural area to a city, you'll also likely see a rise in your State Farm rates. Cities have more people, which generally means higher rates of vandalism, accidents, and theft. Parking your car on the street versus in a secured garage can also raise your premium rate.
If you live in a state that allows insurers to review your credit history, part of your premium may be based on your credit-based usage score, which many companies, including State Farm, use to assess risk. A lower credit score often results in higher rates because it tells the insurance company that you may be more likely to get in an accident and file a claim.
What to do if your State Farm premiums go up
If your premium goes up, contact your State Farm agent first. I called my agent as soon as I saw the price increase on my insurance bill. As part of the phone call, we discussed cost-saving strategies to help me lower my car insurance premium, like:
- Review policy limits and types: When speaking with my agent, the first thing she reviewed was the policy types and coverage limits I had on file. I left my deductible as it was, but we added glass coverage, as I had experienced some issues.
- Consider your driving behavior and mileage: We discussed how many miles I was driving and what my driving habits were like. Since I drive significantly less than I did before the pandemic, I was able to add a low-mileage discount to my policy, which helped offset the cost of the glass coverage.
- Add telematics coverage: My agent suggested signing up for State Farm's telematics program for additional discounts. I ultimately decided against it, but it's an option if needed in the future.
- Seek additional discounts: My agent helped me find other discounts to save money. Although I added coverage, I ultimately paid only a small amount more (less than the initial increase) because the added coverage qualified me for additional discounts. Discuss how your premium pricing looks if you were to bundle policies, take a defensive driving course, or — for young drivers — being a good student or taking a driver's education class.
- Compare insurance quotes: Although my situation worked out, it's a good idea to periodically check pricing with other companies to ensure you get the best deal. Make sure you use the same coverage and policy limits for an accurate comparison.
FAQs
Why did my car insurance go up when nothing changed?
The rising costs of car parts and labor mean that it costs more to repair a vehicle after an accident. Insurance companies pass those increased costs on to their customers, so your insurance may go up even if you didn't change your policy or get in an accident.
How do I bring down my State Farm insurance costs?
Speak with your State Farm agent to see if there are ways to bring your insurance costs down. Ask about additional savings options, such as bundling policies, completing a defensive driving course, or increasing your deductible. If necessary, consider removing excess coverage, but ensure you maintain at least your state's minimum liability limits.
Is State Farm the most expensive car insurance company?
State Farm might be the most expensive option in your area based on factors such as your age, gender, driving record, and the type of car you drive. Where you live can also have an impact on how much you pay for car insurance, because higher populated areas mean more cars and a greater chance of accidents.
Bottom line
If you're concerned about how much your car insurance has gone up recently, contact your State Farm agent for suggestions on lowering your premium. Review your policy limits, coverages, and discounts to see if you can take advantage of additional savings.
Periodically get quotes from at least three different companies to help you ensure you're getting the best car insurance. Also, don't be afraid to let State Farm know if you've found a better price for comparable insurance coverage.
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