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Why Car Insurance Costs Are Rising

National trends are influencing the cost to protect your vehicle.

A number of economic influences are behind these potential rate increases, including inflation, supply chain disruptions, and labor shortages. Put plainly, prices are up:

  • Repair costs are up 40%
  • Hourly labor is up 8.2%
  • Windshields cost 15% more
  • Hoods cost 9% more

Changes in driving habits are also impacting premiums.

  • Speed: Average speeds have increased by as much as 250% in the past year
  • Fatalities: more than 38,800 people are killed in car accidents in the United States every year
  • Distracted Drivers: 660,000 Americans are using cell phones or electronic devices while driving — at any given daytime moment.
  • Fatigue: 328,000 average annual number of drowsy driving crashes and 6,400 fatalities due to drowsy driving
  • Technology: High-tech auto parts (xenon headlights, sensors, cameras, etc.) have resulted in an average increase in claim costs of almost $300 in the last 5 years
  • Lawsuits: In general, more lawsuits are being filed for injuries involved in car accidents
  • Claims: Total loss frequency is up 4.1%
  • Demand: Due to supply shortages, used car prices increased by more than 24% over the past year and new car prices are up nearly 9%

Here are three tips to help you stay in the driver’s seat:

  1. Consider a higher deductible in exchange for a lower rate. Deductibles more than $1,000 are becoming increasingly common.
  2. Don’t forget about any other insurance policies you might have. Bundling your primary policies, such as home and auto, with one carrier could potentially help you save money on both.
  3. Make sure all appropriate rebates are applied like “good student” or “student away from home” discounts.

Ultimately, your premium depends on your individual rating factors like the type of vehicle you drive, your driving and claims history, and the coverage types and levels you choose. 

You may be tempted to lower your coverage to save money. We can help make sure you have the right policy in place and avoid being underinsured. Contact us today.

About the Author

Avery Insurance Agency
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