Rising cost of living will cause the price of all insurance policies to rise slowly. However, you might have seen that your auto insurance price has actually climbed more than normal recently. Most lines of insurance coverage cycle between hard and soft markets over a number of years. And this has a direct effect on the price you pay.
More Drivers Lead to More Accidents
There are increasing numbers of new drivers on the road every day causing our roads to become more and more busy which inevitably leads to more accidents. Insurance carriers have transferred this cost to policyholders by raising premiums.
The number of accidents has also risen because of a boost in harmful driving practices. According to the AAA Foundation for Traffic Safety, a worrisome 87% of motorists confessed to taking part in at least one high-risk behavior while behind the wheel, including using their phones and also not wearing seat belts.
Claim Severity and your Auto Insurance Price
The number of accidents isn’t the only variable impacting auto insurance cases. The size of the typical insurance policy claim– additionally referred to as insurance claim severity– has raised as well. There are 3 main causes of claim severity. The first is an increase in the expenses of treatment. Second, the increase in automobile repair work. And finally, the increase in cost of automobile parts. According to a CarMD recent study, the largest repair expense originates from repairing the newer vehicles’ costly technology. Body shops struggle to afford the unique tools as well as training required to execute the repair services.
Uninsured Motorists
Auto insurance is a requirement in all states as a way to cover your liability to others in case you’re responsible for an accident. Regardless of this though, around 13% of drivers are uninsured. It’s the motorists that follow required insurance coverage laws who end up paying the price in the form of uninsured motorist coverage. According to the Insurance Research Council, without insurance claim repayments have climbed by 75% over the past 10 years, resulting in a $14 exceptional boost for each guaranteed person
Insurance Fraud and your Auto Insurance Price
Insurance is meant to help you in case of an accident. However, many lawbreakers try to unlawfully use insurance policies for their personal gain. Some scams entail an insurance policy holder faking an injury and blaming a 3rd party. Others conspire to trigger an accident that can be blamed on someone else.
The Insurance Information Institute approximates that insurance fraud costs the United States $32 billion per year. Much of this expense is transferred to law-abiding insurance holders.
How Can You Save During a Hard Market?
With auto insurance costs growing in the immediate future, it’s more vital than ever before to be knowledgeable about the steps you can take to reduce your premiums. So, reach out to us at 909.466.7876 to discuss your options for saving money on your vehicle policy. Besides that, we have interesting information on Auto Insurance on our website too; visit to learn more!
