For New Yorkers, the hustle and bustle of city life, coupled with scenic drives upstate, often come with the necessity of reliable car insurance. But like many things in the Empire State, auto coverage can come at a high cost.
Auto Quote Tracker recently uncovered an upcoming rate increase from Allstate Insurance that will bring premiums even higher.
What’s Happening?
Allstate Insurance was recently approved to increase rates by 9.2% for customers in New York. This change is set to go into effect August 23, impacting an estimated 159,430 policyholders. Analysts calculate that the adjustment will raise total written premiums across the state by over $47.5 million, translating to $271 per policy.
Why Are Insurers Increasing Rates?
As drivers see rates go up across the nation, it’s only natural to ask about the reasons behind this trend. In short, insurance companies adjust their pricing from year to year based on a complex algorithm that ensures they can continue to pay out claims and operate sustainably.
Recent adjustments are likely driven by a variety of key factors:
Rising Repair Costs: Modern vehicles are increasingly sophisticated, packed with advanced technology like sensors, cameras, and intricate electronic systems. While these features enhance safety, they also make repairs more complex and expensive. Even a minor fender bender can require specialized tools and highly trained technicians, driving up the cost of claims. Furthermore, supply chain issues and inflation can impact the cost of parts and labor, directly affecting an insurer’s expenses.
Increased Frequency and Severity of Accidents: While it might seem counterintuitive with safer vehicles on the road, some areas are experiencing an uptick in both the number and severity of accidents. Factors such as distracted driving, increased traffic volume, and even more aggressive driving behaviors can contribute to a greater number of claims. More severe accidents, naturally, lead to higher medical costs and vehicle damage expenses for insurers.
Inflationary Pressures: The broader economic climate plays a significant role. Inflation impacts everything from the cost of replacing a totaled vehicle to the cost of medical care for injured parties. When the cost of everything else goes up, the cost of being able to cover those expenses for policyholders also rises.
Catastrophic Weather Events: While perhaps less directly impactful on auto insurance in the immediate sense compared to homeowners insurance, severe weather events can still contribute to claims for comprehensive coverage (e.g., flood damage, hail damage). The increasing frequency and intensity of these events can put a strain on insurance reserves.
Higher Medical Costs: When accidents result in injuries, medical expenses can be substantial and continue to rise. Insurers are on the hook for these costs, which are a major component of bodily injury liability claims.
Uninsured/Underinsured Motorists: A higher percentage of drivers on the road without adequate insurance coverage means that when an accident occurs, your own insurer might have to step in to cover damages that would otherwise be the responsibility of the at-fault party. This can lead to increased costs for all insured drivers.
Allstate, like other carriers, analyzes these trends and adjusts its rates to reflect the current and projected cost of doing business and paying claims in a specific region like New York.
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Strategies to Save on Your Auto Insurance Policy
While news of a rate increase can be discouraging, it’s crucial to remember that you have options. Being proactive can help you find ways to save on your car insurance in New York, even in the face of these adjustments.
Re-quote Before Your Renewal: If your Allstate policy is up for renewal on or after August 23rd, the new rates will apply. However, if your renewal date is before this date, you might still be able to renew at your current, lower rate, effectively delaying the impact of the increase for another policy term. Even if your renewal is after the 23rd, requesting a new quote before that date might lock in a more favorable rate for your next term. Contact your Allstate agent or visit their website to explore your options.
Shop Around with Other Carriers: This is a golden rule of finding a good deal on car insurance. Insurance rates vary significantly between providers because each company assesses risk differently and has its own pricing models. What one insurer considers a higher risk, another might view as standard. Don’t assume Allstate’s new rate means all other carriers will follow suit with identical increases.
Get multiple quotes: Don’t just get one or two quotes. Aim for at least three to five quotes from different insurance companies. Many online tools allow you to compare quotes quickly.
Compare apples to apples: When comparing quotes, ensure you are getting quotes for the exact same coverages, limits, and deductibles. Otherwise, you’re not comparing truly comparable policies.
Review and Adjust Your Coverages: Your current policy might have coverages you no longer need or that could be adjusted to reduce your premium.
Increase Your Deductible: Your deductible is the amount you pay out-of-pocket before your insurance kicks in for collision and comprehensive claims. Increasing your deductible from, say, $500 to $1,000 can significantly lower your premium. Just make sure you have enough in savings to comfortably cover the higher deductible if you need to file a claim.
Consider Dropping Collision and Comprehensive on Older Vehicles: If your car is older and its market value is low, the cost of collision and comprehensive coverage might outweigh the potential payout if the car is totaled. A general rule of thumb: if your car is worth less than 10 times your annual premium for these coverages, it might be worth considering dropping them. However, always weigh the financial risk carefully.
Evaluate Liability Limits: While it’s always recommended to have more than the state minimum liability coverage to protect your assets, review your current limits. If your financial situation has changed, you might be able to adjust them.
Explore Available Discounts: Most insurance companies offer a wide array of discounts that can help lower your premium. Make sure you’re taking advantage of every one you qualify for.
Bundling: Do you have homeowners or renters insurance? Bundling your auto and home policies with the same carrier can often lead to significant savings.
Good Driver/Safe Driver Discounts: If you have a clean driving record (no accidents or violations), you might be eligible for a discount. Some insurers also offer telematics programs (like Allstate’s Drivewise) that track your driving habits and reward safe driving with lower rates.
Multi-Vehicle Discount: Insuring more than one vehicle on the same policy can often lead to a discount.
Good Student Discount: If you have a young driver on your policy who maintains good grades, they might qualify for a discount.
Payment Discounts: You might get a discount for paying your premium in full, setting up automatic payments, or opting for paperless billing.
Anti-Theft Devices/Safety Features: Cars equipped with certain anti-theft devices or advanced safety features (e.g., automatic emergency braking, lane departure warning) may qualify for discounts.
Maintain a Good Credit Score: In many states, including New York, your credit-based insurance score can influence your rates. A good credit score often indicates financial responsibility, which insurers often associate with lower risk.
The Road to Affordable Car Insurance
Next time, get notified as soon as your rates are set to change! Start tracking your policy for free with Auto Quote Tracker, and we’ll send rate change alerts directly to your inbox.
