Auto insurance is a great way to ensure the safety of your vehicle along with your own financial security. This is why most Americans have and are advised to have auto insurance. However, with the increase in auto insurance rates, policyholders are discouraged and are more tempted to switch insurers. Nevertheless, this rise in the auto insurance rate is not without reason. Read on to find out the key reasons for rising auto insurance rates!
Major Reasons for the Increase in Auto Insurance Rates
Removal of COVID-19 Restrictions
Before the COVID-19 pandemic, insurance premiums were relatively high. This was due to the frequent accidents and increase in the number of claims per policyholder. However, when the pandemic came, and bans were put in place, the rate of car movement declined, alongside accident cases and the number of claims. That’s why insurance companies reduced insurance rates, and some even refunded their policyholders. Since the lockdown was lifted, more cars are being driven, and car accident events are increasing. Consequently, the number of claims being filed is also increasing, posing a high risk to insurance companies.
Increase in the Cost of Replacing and Repairing Cars
Additionally, the cost of repairing or replacing cars has also steadily increased. It is important to note that the increase in insurance rates is not deliberate but only due to the market prices trying to normalize themselves. As more people acquire new cars this year, it has been predicted that the prices may continue to rise. As more people begin to drive and mileage increases, there may be a continuous increase in auto insurance rates.
Simultaneously, the cost of repairing cars has also increased, due to delays in repairs, labor shortages, and supply chain problems, putting a strain on auto insurance rates.
Insurers Cut Premium Rates in 2020
Luckily, not all auto insurance companies are eager to increase insurance rates yet. Additionally, despite the increase in insurance prices, they have not surpassed the average pre-pandemic costs by a wide margin as of now. The rates remain comparable to the June 2019 auto insurance rates, as per the motor vehicle insurance index historical database. Hence, this is the best time to buy insurance for your car to provide the necessary coverage.
We’ve Got You Covered
Are you looking for an insurance company that cares as much as you do for your cars? We at Duane Weber Insurance can help you out. We provide flexible payment options and insurance coverage as per your preference. Our team of insurance experts is always available to guide you through. Reach out to our auto insurance professionals today to get a quote!