It seems that car insurance premiums always increase when your policy is up for renewal. As noted by ValuePenguin, “car insurance rates are expected to increase by 8.4% across the U.S. in 2023,” with the average coverage cost already up to $1,780 per year in the US.
Why do insurance rates keep going up, and what can you do to keep them in check? We’ll cover the drivers of increased premiums and how you can combat them, but the easiest thing to do is to shop around ahead of your renewal to make sure you’re paying the right price for the coverage you need.
Insurance Rates are Increasing Countrywide
There are several drivers of the auto premium increases we’ve seen over the past few years, agnostic to driving patterns or incidents for individual drivers, including:
- Increased frequency and severity of accidents. The number of car accidents has been increasing in recent years, and the severity of accidents is also on the rise. This is due to a number of factors, including distracted driving, impaired driving, and speeding.
- Higher repair and replacement costs. The cost of repairing and replacing cars has also increased significantly in recent years. This is due to a number of factors, including inflation, the rising cost of labor and parts, and the increasing complexity of modern vehicles.
- More expensive medical costs. Auto insurance companies are also on the hook for the medical costs of people injured in car accidents. The cost of medical care has been rising steadily in recent years, which is also contributing to higher auto insurance rates.
- More uninsured and underinsured drivers on the road. The number of uninsured and underinsured drivers on the road has also been increasing in recent years. This means that auto insurance companies have to pay more out of pocket when their customers are involved in accidents with uninsured or underinsured drivers.
All of these factors lead to increased prices for most drivers as insurance carriers strive to maintain or improve profitability and remain solvent.
Driver-Specific Issues Could Raise Rates
However, there are also some driver-specific reasons your rates may be increasing faster than other drivers in your area, such as:
- Filing a claim. If you file a claim with your auto insurance company, your rates are likely to go up. This is because insurance companies view drivers who have filed claims as being more of a risk.
- Getting a ticket or DUI. If you get a ticket or a DUI, your auto insurance rates are also likely to go up. This is because insurance companies view drivers with traffic violations as being more of a risk.
- Adding a new driver to your policy. If you add a new driver to your auto insurance policy, your rates are likely to go up. This is because insurance companies view young drivers as being more of a risk.
- Moving to a new area. If you move to a new area, your auto insurance rates may go up or down. This is because insurance companies base their rates on a number of factors, including the crime rate in your area and the number of accidents that occur there.
How Can You Save on Car Insurance?
If you are concerned about your auto insurance rates, there are a few things you can do to try to lower them:
- Shop around for quotes from different insurance companies. There is a lot of variation in auto insurance rates from company to company, so it is important to shop around and compare quotes before you choose a policy. It’s best to get quotes from a few different companies, and Auto Quote Tracker can help you find the best options in your area.
- Consider raising your deductible. Your deductible is the amount of money you have to pay out of pocket before your insurance company will start paying out on a claim. Raising your deductible can lower your monthly premiums, but it is important to make sure that you can afford to pay your deductible if you need to file a claim.
- Take advantage of discounts. Many insurance companies offer discounts for things like good driving records, anti-theft devices, and bundling multiple policies together. Ask your insurance agent about what discounts you may be eligible for.
It is also important to note that auto insurance rates are regulated by the states, so there is some variation in how rates are set from state to state. However, the general factors that drive auto insurance rates up are the same across the country.