Insurance FAQ’s: Why do auto rates increase?

Insurance FAQ’s: Why do auto rates increase?

Have you seen your auto insurance premiums go up in the past couple of years? You aren’t alone. In fact, insurance prices are going up across the board – with every carrier and every type of insurance.

We know that no one likes to see their auto insurance rates increase, so we want to explain why this is happening. There are many factors (many outside of your control) that cause rates to increase. Let’s go through a couple of them.

Factors that drive up auto insurance rates:

• An astonishing increase in reckless driving. Driving your car is more dangerous than ever. After a year in lockdown, Americans are back on the road and studies are showing that accidents are increasing. The severity of accidents is also increasing. In fact, the number of fatal car crashes is up 18.4%. So while you may not be getting into car accidents, more of the drivers around you are. This increased risk across the board (plus the skyrocketing cost of medical care!) causes insurance companies to increase their rates.
• An increase in weather-related disasters. Insurance companies also need to evaluate the risk of potential weather-related disasters and the impact that could have on the number of claims they are receiving. In 2021, there were 18 (!) weather-related disaster which cost over $1 billion in losses. As they predict this trend to continue, you’ll see an impact on your insurance costs.
• It’s more expensive to repair and replace cars. Between supply chain issues, labor shortages, and increases in the prices of new and used cars, insurance companies are paying out more money each time someone has an accident. In fact, average car insurance claim costs are up 20%. In order to combat this, insurance companies increase their rates.
• Litigation is expensive. Settlements are rising at an unprecedented rate.

We know an increase in your insurance premium is frustrating – especially when there are contributing factors that are out of your control. However, there are things that you can do to make sure you are saving as much money as possible.

Our Best Tips for Saving on Your Auto Insurance Premium

1. Get your policies coordinated. Do you have all of your polices with one agency? If not, you could be missing out on discounts. Coordinating your policies is one of the easiest ways to save money!
2. Schedule a time to have a policy review with your agent. At Holley Insurance, we do a annual policy review with every one of our clients. This ensures that your coverage is up-to-date and we about check to make sure that you are receiving every possible discount.
3. Check your discounts. We’ve compiled a comprehensive list of auto discounts here. See one that you qualify for that you aren’t taking advantage of yet? Reach out to your insurance agent and let them know!
4. Consider adding additonal coverage to save you money down the road. It might make sense to add additional coverage on your auto policies now to help save you money down the road in the event of a claim. Things like “Premier Roadside Assistance” or “Premier New Car Replacement” coverage on your policy would help reduce your costs if you have an auto claim.
5. Think about increasing your deductibles.
6. Join your insurance’s safe driving telematic programs to save money. One example of this is Erie’s YourTurn program.
7. Consult your agent before filing a small claim. In some cases, it might be better option for you to absorb the cost instead of filing a claim.

Have questions about your auto insurance? Want to see if Holley Insurance can find you better coverage at a better price? We can help! We are independent insurance agents with options to help you navigate this crazy market without sacrificing coverage. Start your quote online here or give us a call at 540.334.4225.

A little more about Holley Insurance…

Holley Insurance was founded in 2000, and retains a core base of loyal clients. We have locations in Roanoke, Rocky Mount, and Forest, VA. As an independent insurance agency, Holley Insurance represents a carefully selected group of financially strong, reputable insurance companies. Therefore, we are able to offer you the best coverage at the most competitive price. Holley Insurance was named “Top Insurance Broker in Southwest Virginia” by Virginia Living Magazine for 2021. If you’re interested in starting a quote online or having us take a look at your current policies, click here!