Navigating the world of car insurance can sometimes feel like driving through Atlanta rush hour– complex and potentially costly. If you’re one of the many Georgia drivers insured by American Family Insurance, you’ll want to pay close attention to your upcoming renewal. The company is set to implement a significant rate increase for its Georgia auto insurance policies.
What’s Happening?
Starting August 17, American Family Insurance is raising its overall rates by an average of 11.2% across the state of Georgia. This isn’t a minor adjustment; it represents a substantial shift in premiums for roughly 36,060 policyholders.
In total, this rate change is expected to increase the aggregate annual premiums by over $17 million– an estimated $429 per policy.
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Why Are Car Insurance Rates Increasing?
It’s easy to point fingers at a single company, but the reality is that rate increases are often driven by broader trends affecting the entire insurance industry. Here are some common factors that may be contributing to the change.
- Increased claims frequency and severity: Georgia, like many states, has seen shifts in driving patterns and accident rates, sometimes influenced by factors like post-pandemic driving habits. More accidents, and accidents that are more severe, naturally lead to higher claim payouts for insurers. Furthermore, Georgia experiences its share of severe weather events (like hurricanes, tornadoes, and severe thunderstorms) which can cause widespread vehicle damage and trigger waves of claims.
- Soaring repair costs: Modern vehicles are packed with sophisticated technology – sensors, cameras, complex computer systems. While these advancements enhance safety and convenience, they also make repairs significantly more expensive. Replacing a simple bumper might now involve recalibrating sensitive equipment. Coupled with inflation impacting the cost of parts and skilled labor shortages driving up wages at repair shops, the average cost per claim has risen dramatically. Supply chain disruptions experienced over the past few years have also played a role in parts availability and cost.
- Medical cost inflation: Car accidents often involve injuries, and the cost of medical care continues to climb. Higher medical bills resulting from accidents translate directly into higher claim costs for liability and medical payments coverage.
- Economic factors & inflation: General economic inflation affects nearly every aspect of an insurance company’s operations, from office expenses to the cost of materials used in repairs.
- Litigation environment: Some analyses suggest that Georgia has a relatively high cost associated with insurance-related litigation (sometimes referred to as “tort costs”). When legal expenses and settlement amounts rise, these costs can be factored into insurance premiums. Efforts towards tort reform in Georgia aim to address this, but it remains a contributing factor.
What This Rate Hike Means for You
If you’re an American Family Insurance policyholder in Georgia, this 11.2% average increase means your premium will likely go up upon your next renewal occurring on or after August 17, 2025. It’s crucial to remember that this is an average increase.
Your specific rate change could be higher or lower depending on your individual rating factors, such as your driving record, the type of vehicle you insure, where you live in Georgia, your claims history, and coverages selected.
How to Get Cheaper Car Insurance
The good news is that you aren’t powerless against rising rates. You have several options to explore to potentially lower your costs or find more affordable coverage elsewhere. The key is to act before your policy renews at the higher rate.
- Shop around: This is the single most effective strategy. Insurance pricing is highly competitive and varies significantly between companies. Use a comparison tool to get quotes from multiple insurers, exploring a mix of national carriers and regional companies.
- Ask about all available discounts: Insurers offer a wide array of discounts, but they aren’t always automatically applied. Be proactive and ask your current agent or potential new insurers for a full list.
- Maintain good credit: In Georgia, insurers are legally permitted to use a credit-based insurance score as one factor in determining premiums. Paying bills on time and managing debt responsibly can positively impact your credit score– and in turn your insurance costs.
- Drive safely: Your driving record is paramount. Avoiding accidents and traffic violations is the foundation of lower insurance rates.
- Consider usage-based insurance: If you’re a safe, low-mileage driver, programs that monitor your driving habits via a smartphone app or plug-in device could offer significant savings. Companies like Allstate, Geico, Progressive, State Farm, and others offer these options.
Be Proactive in Managing Insurance Costs
As the cost of insurance continues to rise, avoiding increases is crucial to managing your budget. The most effective way to keep your insurance costs down is to shop around ahead of your renewal, especially when a rate increase is on the horizon.
Start tracking your policy for free with Auto Quote Tracker, and we’ll send rate change alerts directly to your inbox.
