Why Is Car Insurance So Expensive In Pennsylvania?

Drivers across the country have noticed a significant rise in car insurance premiums. In Pennsylvania, for example, premiums went up by an average of 35% in 2024. Car insurance rates differ from state to state due to each state’s unique regulations and risk factors.

Understanding the reasons behind the rising premiums in your state is important. With this knowledge, you can make informed decisions, like adjusting your coverage or looking for discounts to help lower your costs.

With over 20 years of experience in the insurance industry, I can provide some additional insight into this issue. Keep reading to learn why car insurance is so high in Pennsylvania.

Unique Reasons Why Car Insurance In Pennsylvania Is So High

The cost of  Pennsylvania car insurance can be attributed to the following reasons as noted below.

No Fault Law

Pennsylvania follows a no-fault insurance system, which means drivers can file claims with their own insurance for medical expenses, no matter who was at fault in the accident. This system often results in more claims being filed, particularly for medical bills, which can increase the cost of premiums. Insurance companies raise rates to cover these higher claim volumes, especially since they pay for medical costs upfront and might have to recover costs later.

High Population Density

Pennsylvania is the 5th most populous state in the U.S. with over 13 million people. More people on the road means more vehicles, leading to more traffic congestion and a higher risk of accidents. Dense traffic increases the likelihood of collisions, whether they are minor or serious accidents, causing more claims and higher insurance premiums for all drivers in the state.

Increasing Repair costs

The cost of car repairs has been rising in recent years, especially with newer vehicles having advanced technology, expensive parts, and high labor costs. If an accident occurs and a vehicle needs repairs, the insurance company must cover those costs, which leads to higher premiums across the board. Additionally, if newer models with expensive technology are involved in accidents, it often means more costly claims for insurers, which they pass on to consumers in the form of higher rates.

Severe Weather

Pennsylvania’s weather can be extreme, with heavy snow, ice storms, and flooding common during the winter and spring. These weather conditions contribute to slippery roads, which increase the risk of accidents, especially in the winter months. Severe weather events like hailstorms can also cause significant damage to vehicles. Since insurers must pay for these damages, they raise premiums to cover the added risk of claims related to weather-related incidents.

High Vehicle Theft Rate

Vehicle theft in Pennsylvania can also be a major contributor to higher insurance rates. In 2023, Pennsylvania saw 34,116 vehicle thefts, marking a 60% rise compared to 2022. In areas with high theft rates, insurers see a larger number of stolen vehicle claims. To offset this higher risk, they charge higher premiums for drivers living in areas with more vehicle theft. Additionally, the theft of high-value cars or parts can increase overall insurance claims, leading insurers to raise rates for everyone in the state.

Factors Causing Your Car Insurance To Be So High

Many factors can influence how much you pay for car insurance. Here are some of the most common ones that can impact your premium.

Age

In Pennsylvania, drivers under 25 and over 65 typically pay higher auto insurance rates because they are statistically at a higher risk of being involved in serious or fatal accidents. Younger drivers, especially those under 25, often lack the experience and defensive driving skills of older drivers, making them more prone to accidents.

Average full coverage for drivers under 25 is 1,851. On the other hand, drivers over 65 may face slower reaction times and other age-related issues that increase the risk of accidents. Insurance companies charge higher premiums for these age groups to compensate for the higher likelihood of costly claims.

Credit Score

Your credit score can have a significant impact on your car insurance premium. Insurance companies often use credit scores to assess the level of risk you present as a driver. Studies have shown that people with lower credit scores are more likely to file insurance claims, so insurers may charge higher rates to individuals with poor credit. On the other hand, those with good credit scores are generally considered less risky, which can lead to lower premiums.

Insurance Company

The insurance company you choose can greatly affect your car insurance rates. Different companies use varying methods to assess risk and set prices, so premiums for the same coverage may differ from one insurer to another.

Insurance companies also offer a range of discounts, such as for safe driving, bundling policies, or having a good student. It’s important to shop around, compare quotes, and consider factors like coverage options, customer reviews, and discounts when selecting the right insurance company for your needs.

Coverage Level

Pennsylvania law mandates that drivers carry at least $15,000 per person and $30,000 per accident in Bodily Injury Liability coverage. You must also have a minimum of $5,000 in Property Damage Liability. As a No-Fault state, Pennsylvania requires you to have at least $5,000 in Personal Injury Protection (PIP) for each person on your policy.

The level of coverage you choose affects your car insurance rate in Pennsylvania. If you select higher liability limits and full coverage, your premium will likely go up. On the other hand, choosing a higher deductible can help lower your rate.

Gender

Gender can affect car insurance rates, with men and women often paying different premiums. Statistically, in Pennsylvania young male drivers tend to have higher accident rates and are more likely to engage in risky driving behaviors, such as speeding or driving under the influence, which makes them a higher risk for insurance companies.