Auto Insurance Rates Are On The Rise

By January 22, 2019 Personal Insurance

It seems to be everywhere that we look today.  The cost of living is on the rise in every part of our world.  Just recently, we received our cable and internet bill which contained one of these such increases which compelled me to contact our provider and ask the questions to why.

We see much of the same in our industry here – most often in the segment of personal auto insurance.  You, like so many others, have very likely received your renewal just to wonder why the cost of auto insurance continues to rise.  In a recent Forbes article, it relays how the nation has experienced the largest five-year growth in auto insurance premiums since the early 90’s.

This is not without cause.  Simply put, the rising cost of auto accidents, coupled with the increased frequency at which they occur, make these price adjustments necessary in order for an insurance carrier to remain solvent.  Here are just some of the contributing factors to this trend.

Distracted Driving

You may think that “distracted driving” exclusively refers to using mobile devices while operating an automobile.  While this is the chief culprit in such cases, distractions during driving can also be eating, drinking, or adjusting a vehicle’s audio system.  Despite laws and campaigns that discourage this behavior, there are still thousands of deaths and hundreds of thousands of injuries that occur each year from this practice.  Increased numbers and severity of injuries will result in higher auto claim costs.

Weather

How could weather effect auto insurance?  Policies that carry comprehensive coverage on the vehicles will cover the damage to said vehicles from weather related events.  This can be flooding, hail or even tornadoes.  We have seen a noticeable shift in weather patterns and severity over the last decade.  In 2016 alone, there was estimated to be over $300 billion in damage from natural disasters.

Vehicle Technology

While convenient to have features such as back-up cameras, lane departure notifications and crash detection sensors, the cost to repair such items in a collision can run into the thousands alone.  These types of technologies have contributed to an increase of 61% in automobile repairs over the past two decades.

The combination of these factors, coupled with the fact that there are more vehicles and drivers on the road than years past, compel insurers to adjust their rates to meet the ever-growing cost of auto claims.  But there are steps that you can take to help control your expense.

  • Ask about policy discounts: Many auto insurance carriers offer credits off your premium for items such as:
    • insuring your auto and home with the same carrier
    • discounts for students that maintain a “B” average or better
    • driver monitoring programs
    • and potentially more!
  • Pay insurance premiums in a timely manner: Some insurance providers extend a discount to their insureds that have a good pay history. Late or missed payments can affect your insurance premium.
  • Exercise safe driving habits: A responsible approach to your driving will pay you in the long run. In today’s times, even a minor moving violation such as speeding or disobeying a traffic signal can cause your insurance rate to increase drastically.
  • Know before you buy: When you are looking at replacing or obtaining a new vehicle, make it part of your process to contact us during the shopping process to see how any vehicle that you are considering would affect your premium. This can avoid insurance “sticker shock” and allow you to make a more informed buying decision.

We always invite our clients to contact us should they have any questions or concerns over their auto rates.  Remember that Williamson Insurance is an independent insurance agent meaning that we have choices for you.