If you’re concerned about the high cost of car insurance, you’re not alone. In the middle of 2020, car insurance rates dropped for the vast majority of individuals. This was due to the fact that people were driving less and as a result, were less likely to get into an auto accident. Unfortunately, even if you’re still driving less, you’ve probably noticed an increase in your rates, and there are five primary factors affecting current car insurance premiums.
1. The Supply and Demand of New and Used Vehicles
When it comes to getting all the available safety features, purchasing a new vehicle is preferable. Unfortunately, there are fewer new vehicles available to purchase due to a shortage of raw materials. This means that an increasing number of people are now purchasing vehicles that are a few years old and driving up the prices of those vehicles. When it comes to auto insurance claims, higher prices mean higher rates due to the increased replacement and repair costs.
2. The Supply and Demand of New and Used Car Parts
Since more people are buying used cars, the demand for car parts is up. Unfortunately, due to labor shortages and shortages of raw materials, the supply of new and used car parts is down. This is increasing the prices of car parts and the cost to repair vehicles. In fact, it’s estimated that the prices for car parts have increased as much as six percent. It’s bad news for your insurance premiums because insurance companies factor in the average cost of repairing vehicles after an accident when they underwrite a policy.
3. Lack of Auto Technicians
Fewer people have been going into skilled trades over the last several decades, and this includes automotive technicians. Repair shops are having a hard time recruiting and keeping qualified auto mechanics, which means repairs are taking longer.
When repairs take longer, it means people have to drive rental cars longer, and if that rental car is being paid for by an insurance company, they are taking that into consideration when underwriting policies.
4. High Cost of Injuries and Medical Care Coupled with Legal Intervention
It’s estimated that medical costs have increased by as much as seven percent in 2021, and costs were already up six percent in 2020. More individuals are also seeking legal help when dealing with auto insurance claims due to the promise of higher payouts and a general societal distrust of large corporations. The truth is that the insurance industry is heavily regulated and must follow certain rules when investigating and paying out claims. Otherwise, they could be subjected to fines and other penalties by the Office of Insurance Regulation. Unfortunately, the costs of legal intervention combined with higher medical bills have driven some of the increases seen in auto insurance premiums, which is bad news for driver’s budgets.
5. Higher Car Repair Costs
The truth is that vehicles are more advanced today and have more technology. They are operated by computer chips and sensors that monitor fuel flow, braking and gas usage. New and used cars also contain cameras for increased visibility around the car and advanced collision avoidance systems. All of these technologies are expensive to repair and replace, which can result in higher insurance premiums.
Of course, there are things you can do to make your car insurance more affordable, like choosing a higher deductible and making sure you are getting all the discounts that are available to you. Additional factors that control your auto insurance rates include your credit score and where you live. While the latter two may take longer to change, you can also look into moving to a safer neighborhood and increasing your credit score. If you are looking for a more immediate reduction in your car insurance premiums, consider shopping around. Choosing a different insurance carrier can result in lower premiums because different carriers use different metrics in order to determine the cost of a policy.
Finding Affordable Insurance with Fearnow Insurance in Florida
If you haven’t been able to find affordable car insurance for your new or used car, ask our agents at Fearnow Insurance. Our clients have noticed insurance premium savings of up to 37 percent with our auto insurance policies. This is because we have the ability to look at numerous policies from many different carriers in order to find you the best policy for your budget and driving habits.
To learn more about our car insurance policies and to get a free quote, give us a call at 813-689-8878.