Car Insurance Premiums Soaring! Consumers ask Why!?

Car insurance premiums are set to increase by 26% on average in 2024. Maybe you've already felt this or maybe you're worried about an increase. Whether you've noticed it or not, it's good to stay on top of your premiums this year.

But why are premiums going up?

It all has to do with the world we currently live in. Three major factors appear to be affecting car insurance in the U.S. right now:

1. Inflation

Inflation is affecting many segments of the U.S. economy so it's no surprise that it is also affecting insurance rates. As insurers' costs go up, so will your rates.

2. Supply Chain Squeeze

Many areas of the supply chain for car repairs have been impacted by the pandemic, creating a higher demand and more scarcity for parts. Manufacturers are working to fix this, but it could take time. As people submit claims to have their vehicles repaired, the costs for obtaining parts quickly goes up. This results in insurance companies paying more to cover their customers' claims. And, of course, they don't want to lose money there so they pass it on to the rest of their consumers.

3. Increasing Crime

Vehicle thefts are happening more frequently (as much as a 34% increase in 2023!), and of course, this is resulting in more insurance claims. The more claims there are, the more the insurance companies need to pay. The more insurance companies need to pay, the more they will pass that cost onto their customer.

Where is a superhero when you need one?

Of course, you may not be experiencing as big an increase, or maybe you are seeing a huge increase in your rates (New Jerseyans could see up to a 50% increase in 2024!) Insurance companies tend to set rates by state. Those who live in disaster prone areas, such as states that see floods or hurricanes, will typically pay more than those who do not.

But even if you don't live in these areas, your rates could still be sky high or set to increase. Insurers take a number of factors when determining what you should pay. This is known as your driver profile. These can include:

1. Credit score
2. Accident history
3. The type of car you drive
4. How many cars you intend to insure
5. Your age
6. etc.

So, what can you do?

If you're not keen on paying more for your car insurance, it's best to shop around. And don't just take our word for it, a quick Google will likely tell you the same thing. Comparative shopping is your best friend when trying to lower your rates. Here's some tips:

1. Bundle your home and auto insurance if possible to achieve the best rates
2. Ask about low mileage discounts if you don't intend to drive very far
3. Determine what type of coverage you actually need. You could pay less if you do not need full coverage.
4. Maintain a good credit score
5. Practice safe driving habits

If you're interested in seeing how much you could potentially save, we can help! You can click here and start filling out the form to begin your comparison journey. It takes as little as two minutes and is 100% non-commital, meaning you don't have to switch if you don't want to!

All in all, car insurance appears set to be increasing due to factors that could be outside any one person's control. It's best to stay informed and aware of why your rates might increase so it does not catch you unaware.