You may have noticed your car insurance rates go up at your last renewal, even if you’ve had no new accidents or tickets.
If your rates haven’t gone up yet, brace yourself: Car insurance companies have been losing money recently, and many will have to raise premiums to remain profitable.
Car insurance rates typically go up about 3% or 4% every year, according to the Consumer Price Index. But in December 2017, they were up 7% from the previous year. Because the industry is expected to lose even more money this year due to more claims — and more expensive claims — we can expect insurers to kick up their rates even more. Here are some causes behind the bigger bills.
Problem No. 1: More people have jobs
A better job market isn’t helping insurance rates. Unemployment has dropped from 10% in October 2009 to 4.3% in July 2017.
With more people employed there are more drivers on the road which inevitably leads to more accidents.
Problem No. 2: Fewer people looking at the road
Most of us have been distracted by a cell phone behind the wheel. A recent NerdWallet study found that 67% of Americans surveyed who had driven in the past 12 months had used a cell phone while driving during that time.
Cell phones aren’t the only distraction on the road. The problem also includes radios, focusing on other passengers in the car, and eating.
Problem No. 3: Claims are getting more expensive
Every insurance company has seen a continual rise in claims costs due to more expensive vehicle repairs and rising medical costs in recent years.
Medical bills: You might not think of medical bills as a big contributor to car insurance premiums, but auto insurers, not health insurers, often end up paying for medical costs due to car accidents. The cost of hospital care rose 32.5% between November 2010 and November 2017.
Cars cost more – parts cost about 17% more than they used to. Bumpers aren’t just bumpers anymore; they have sensors, cameras and other circuitry. As our cars get more advanced, the cost to fix them goes up too.
How to keep your rates down
Compare insurance quotes every year and after major life changes such as moving or getting married.
If you drive less than 10,000 miles per year, consider a usage-based or per-mile insurance policy.
Take steps to improve your credit, which affects car insurance rates in all states except California, Hawaii and Massachusetts.
Ask your agent to do a periodic review for possible discounts.
Consider buying your auto and home insurance from the same company for a bundling discount.
Call us for a quote or if you have any questions about your policy
AZ Insurance Team 480-535-5709 https://www.azinsuranceteam.com/contact
*All policies are a little different and this may not be applicable to your insurance policy, talk to your agent to see what your policy covers.