Why Your Car Insurance Rates Go Up – and What You Can Do About It
By Pekin Insurance · Nov 20, 2018 ·2 min read
You probably don’t smile when you pay your bills. You might think about how those dollars could send you to Cancun or Punta Cana.
If you’re in a particular mood, you might call or email to find out why your car insurance rates went up. According to Forbes, the consumer price index (CPI) for auto insurance has increased by 21.5% since 2012, which is the largest five-year growth for auto insurance costs since the early 1990s.
If you wonder what caused such a surge in prices, continue reading to discover why your auto rates increase and how you can keep them lower.
More Cars = More Accidents = Higher Costs
According to Statista, the number of registered vehicles has increased every year since 2010, when there were nearly 250 million registered vehicles in the United States. There were approximately 269 million registered vehicles on the road in 2016, the most recent year with available data.
There are more auto accidents because there are more cars on the road, and auto accidents cost more than ever.
Hospital bills will be much more expensive if a wreck leads to injuries. According to the Bureau of Labor Statistics, the cost of medical services has risen by 12% since 2012.
Vehicle repairs cost more than ever. Vehicle technology continues to evolve with features such as parking assist, lane departure warnings, and backup cameras. This technology gives drivers plenty of convenience, but it comes at a price. Vehicle repairs cost nearly 61% more in 2017 than they did in 2000.
Distracted driving is yet another reason for auto insurance rates increasing. Studies have determined that the human brain is terrible at multitasking, so you put yourself at risk when you drive and text, call, eat, or adjust the audio system.
Organizations like the National Highway Traffic Safety Administration (NHTSA) and National Security Council combat distracted driving with awareness campaigns. Unfortunately, distracted driving led to 3,450 traffic deaths in 2016 and 391,000 injuries in 2015.
Comprehensive auto coverage accounts for several risks, including natural disasters. In 2017, 16 separate natural disasters in the U.S. combined to cause $306.2 billion worth of damage.
In 2013, Hurricane Sandy led to 54,642 auto claims in New Jersey with insurance companies paying out $530 million to auto repair shops.
Recurring extreme weather such as floods, hurricanes, and tornadoes could lead to higher auto insurance rates for customers in affected regions.
The Number of Uninsured Drivers in Your Area
You’ll want protection if another driver causes an accident but doesn’t have any auto insurance. Your auto rates could increase if you live in an area with a higher concentration of uninsured drivers. According to the Insurance Journal, the percentage of uninsured motorists varies by state with Florida having the highest uninsured rate at 26.7%.
How to Keep Your Rates Lower
Though some factors are out of your hands, you can take the following steps to keep your rates lower:
- Monitor your available discounts such as auto/home bundle and multiple vehicles.
- Give up your lead foot. Drivers get better rates if they don’t have speeding tickets.
- Ask for a higher deductible. Though this can help you lower your rates, it will also increase the amount you’re responsible for paying in the event of a claim.
- Before you buy your next vehicle, see how much it costs to insure it. This is determined by repair costs, likelihood of theft, and safety scores and records.