Why Are Car Insurance Rates Going Up?
As an independent insurance agent I get information from a much broader slice of the industry than I did when I was captive to one company. Sometimes this information helps me find better coverage options or lower rates for my clients. Sometimes, as in this case, it merely helps to understand the landscape.
Several companies have been telling me for months to expect higher auto insurance rates sometime this year. There are several reasons they give, from lower gas prices increasing road time of drivers to increasing medical costs. Here is one that you may not think about; the cost of vehicle technology. Here’s an infographic that may help:
If you click on the graphic you will see how an accident that might have been minor a few years ago could now cost thousands of dollars due to the sensors, cameras and other advances in technology. We are stuck in an age where we want these advances as they make life more convenient and safer. We also have to deal with the increase in the repair cost though.
Some things to consider in this climate that can decrease your insurance premiums are:
- Consider a higher deductible and keep some savings on hand to “self insure” the deductible.
- As always, different insurance companies rate various vehicles differently. If one company has data that tell them a particular vehicle is more costly to insure, another may not. I advise shopping about every 3 years on average.
- Ask your agent before you buy a new car to see what the rate will be. This way you can plan those expenses before you drive off the lot when it may be too late.
- Maintain other factors that reduce your insurance costs such as bundling auto and home policies with one company, keep a good credit score, maintain a good driving record.
Prices are not likely to drop soon, take measures as you can to find the right company for the protection you need.