You were a safe driver last year. You didn’t get into an accident, file a claim, or even a ticket, so why did your auto insurance rate increase?
Insurance premiums are calculated and based on risk and projected cost on repairs and replacement.
Inflation, inflation, inflation. Are we all just tired of hearing about it? Particularly when it comes to how inflation is impacting insurance rates. Car prices have risen due to supply chain issues and shortages brought on by the pandemic, and with labor not only rising in cost, but limited in overall number of workers, repairs and car replacements are also being significantly affected.
Adding to the mix, the more vehicles equipped with expensive computers and automated functions, the higher the price of the car and the repair. Say hello to higher insurance rates for drivers all over the US.
Interestingly consumers in all age groups who used rideshare services and public transportation in previous years shifted into becoming drivers following the pandemic. This led to a surge of drivers on the road and carried along a surge in accidents and injuries too. Even if you are the most defensive driver with the safest record, more drivers on the road carried a climb in injuries and pushed liability insurance up.
When the lockdown ended and drivers were back on the road, dangerous behaviors of impaired driving, speeding, distracted driving, and people not wearing seatbelts led to a rise of traffic-related deaths too. 2021 experienced a 12% rise in deaths, which was the highest number of any year since 2006. Insurance companies had to combat the rising costs and drivers everywhere have continued to see an increase in premiums because of it.
No one thinks that rising healthcare costs can impact car insurance, but it most certainly does. Rising healthcare costs in the US are no surprise, but almost all states require liability insurance, so when the country experiences a rise in accidents and injuries, you can be sure more injuries mean more hospital bills and lawsuits, and of course, a rise in the cost of our liability insurance too.
Severe weather doesn’t only pose a threat to homes, but cars are at high-risk too. Hail, high winds causing falling trees and power lines, wildfires, flooding - the list goes on. Your car becomes a sitting duck against these catastrophic events. Typically your comprehensive coverage helps with repairs caused by natural disasters, so if you are in an area that is experiencing higher occurrences of severe weather, you can bet you are going to see higher insurance premiums to protect your car.
Stolen automobiles, stolen catalytic converters, damage from break-ins, and increases in carjackings have led to a significant increase to auto insurance premiums nationwide. In fact, the National Insurance Crime Bureau (NCIB) reported in 2020 there were 880,595 cars, trucks, and SUVs stolen in the US.
Think about that. That is one vehicle stolen every 36 seconds - every single day for an entire year. And it’s the highest in decades, and 2021 was worse. The NCIB reported nearly 1 million vehicles were stolen in 2021.
Contributors to the rise in auto crime included the pandemic, economic downturn, law enforcement realignment, depleted social and schooling programs, and in many cases, owner complacency. Motorcycles too are in threat from theft, with 51,291 stolen in 2021, up 26% overall from 2019.
Auto crime accounts for some of the highest escalation of crime across the US now, and industry professionals do not see it declining any time soon.
With these types of numbers, even if you don’t file a claim, get a ticket, or change your driving status, you are going to be among the millions of drivers experiencing an increase to your insurance premium.
Drivers can qualify for discounts and even changing their deductible to offset the rise in rates, so make sure to check insurance rates and coverage to see if we can help you save during these uncertain times.
We are here to provide you unbiased coverage counseling - always!