Factors Contributing to the Increase in Car Insurance Rates
Factors Contributing to the Increase in Car Insurance Rates
If you’ve seen an increase in car insurance rates recently, you may be wondering why. After all, more people are working from home which should mean fewer cars on the highway. Aren’t cars safer now than 20 years ago? Heck, each of us is getting older and shouldn’t that translate to lower car insurance rates? It may be a bit more complex than it looks.
Inflation
One of the reasons car insurance rates increase is because of inflation. Repair shops charge more because their utility rates go up, rent increases and labor costs are rising. Inflation can vary from time to time, but it is always on the uptick. Ask your grandparents and parents what they paid for their first home and compare it to what you paid for yours. THAT is inflation.
Cars Are More Complex to Repair
Cars have more monitors, sensors, and cameras than ever before. What once was a minor fender bender may result in damage to a series of electronics and digital devices. The way cars are engineered today means that multiple parts may have to be removed to access a damaged part. This all increases repair costs, translating to higher car insurance rates.
Fraud
Not every insurance transaction is conducted in good faith. Fraudulent and over-stated claims contribute greatly to higher insurance rates for those who play by the rules.
Vehicles are More Valuable
Average new car vehicle prices are reaching in excess of $40,000. This makes even the most minor repairs expensive. What used to be considered a minor dent or scrape can cost into the thousands of dollars to repair properly.
Consumer Expectations are Higher
There is nothing wrong with high expectations from an insurance company when you have a claim. But expectations of meticulous repairs done expertly in a prompt time-frame can come at a cost. Auto insurance is not that much different from other consumer products in that you often get what you pay for. Price is always a consideration when it comes to car insurance premiums. But it shouldn’t be the only consideration.
Your best opportunity in keeping automobile car insurance rates in check is to become a better driver, and to compare insurance rates. Our independent insurance agents can help. When you contact one of our agents, they go to work comparing rates from a number of companies in our independent network. These include some of the most recognizable brands in the industry and some lesser known companies that are gems. You decide.
Feel like you are paying too much for car insurance? Contact us. Let us see what we can do.
