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Home > Blog > Why Car Insurance Goes Up
MONDAY, JUNE 20, 2022

Why Car Insurance Goes Up

Car insurance is required for most vehicle owners, depending on your state regulations. It can be surprising when your premium increases if it’s not due to accidents, tickets, poor driving records or insuring teens.  

Rates can increase for many different reasons, but there are ways to try to offset these costs. At Peachstate Insurance, we’re here to help you get the best rate for your auto insurance policy.  

Reasons Rates Are Rising young female driver holding keys to car
Your car insurance rates are calculated depending on a variety of factors, including your age, gender, driving history, vehicle type and policy. When the premium rate increases, this is due to factors outside of the initial calculation. Factors that are causing rates to rise may include the following. 

Inflation 
This is the number one factor that causes higher insurance premium rates. Inflation has caused the price of both new and used cars to rise significantly over the last year. The overall cost of car ownership, in general, has also increased due to new technology and the complexity of vehicles. The cost of accidents goes up due to damaging intricate electronics within the cars that are expensive to replace.  

Supply Chain Disruptions 
In the aftermath of shutdowns caused by COVID-19, there has been a significant increase in supply chain disruptions. Because of the difficulty in getting parts, cars are more expensive to repair. Semiconductors were the hardest hit. 

Labor Shortages  
Companies are struggling to find skilled workers. The “Great Resignation” has had many professionals reconsider their career paths and created shortages due to job changes. With fewer workers available, this can contribute to raising insurance costs because repair costs are higher.  

Changed Driving Habits 
When COVID-19 hit, there was a decrease in driving due to stay-at-home orders. Once workplaces, schools and activities returned to in-person activities, there was an increase in accidents and their severity. More accidents also mean insurers must rebuild claim reserves, which means paying higher premiums.  

How to Lower Premium Costs 
While you can’t completely prevent premium costs from going up, some policy elements are within your control. To help avoid increased costs in your premium, try following a few of these tips:  

  • Review your current policy. Knowing the ins and outs of your policy can help you understand when a change occurs and why. If you have additional questions about your auto policy, this is an excellent time to check in with an agent. 
  • Take advantage of discounts. One of the easiest ways to lower your premium costs is to be on top of your discounts.  
  • Bundle your policies. Sometimes you can save money by bundling policies such as home and auto. Check with an agent to determine whether or not this is an option for you.  

Get Started Saving Today 
At Peachstate Insurance, we’re here to help you stay on top of rising rates while understanding how your policy is impacted. If you’re looking for further discussion or have additional questions about your policy, reach out to an agent today.  

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information. 

 

Posted 9:52 AM

Tags: auto insurance
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NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
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