Why Did My Car Insurance Go Up?

Why Car Insurance Rates Go Up and What You Can Do About It

A Floridian’s average car insurance premium is $2,560 yearly, a 23% rise from 2021. This trend can be alarming, especially when you don’t understand why car insurance rates go up and if you can do anything. From driving habits to supply chain issues, here’s what you should know about increasing auto insurance costs.

Why Car Insurance Rates Go Up: Time to Assess Your Driving Profile

Certain driving factors impact your car insurance rates:

Location

Believe it or not, ZIP codes are one of the reasons why car insurance rates go up. For instance, if you live in an area where weather claims (storms) are common. On the same note, you may have to pay more if you live in a metropolitan area that experiences more car theft cases than rural areas.

Age

Younger drivers generally pay the highest auto insurance rates due to the increased risk of car accidents. While auto insurance prices reduce as you accumulate driving experience, they will increase once you move from being a middle-aged driver to a senior driver.

Driving record

Another reason car insurance rates go up is because of your driving history. Does your driving record include DUIs and traffic violations? An insurance company without prior knowledge of your driving habits will charge a higher premium once they find out.

The good news is that it’s possible to improve your driving record. We recommend safe driving and avoiding at-fault accidents and speeding tickets.

Vehicle Model

Switching to a new car model increases personal auto insurance rates. For instance, if you recently upgraded to a sports vehicle. Other variables for why car insurance rates go up include repair costs, the car’s safety record, and insurance costs for similar car models.

Credit Score

Many insurers use credit-based insurance scores to determine auto insurance rates. The belief is that this credit score predicts the possibility that you’ll file a claim. Therefore, a decrease in your score may result in an insurance rate increase at the time of renewal.

Why Car Insurance Rates Go Up: Market Factors

Your insurer may increase your auto insurance rate for other reasons besides your driving record:

Inflation

The pandemic resulted in manufacturing shortages, leading to an increased money supply. The Bureau of Labor Statistics reported a rise in auto insurance rates of 12.9% between October 2021 and October 2022. Other findings from the report include the spiraling of the consumer price index and rising labor costs. Moreover, the ongoing Ukraine crisis has skyrocketed oil and other commodity prices.

High repair costs

Car repair costs have sharply risen over the past year. Considering that the insurance company covers these expenses, it’s one of the reasons behind car insurance rate increases. The high loss ratio because of the pandemic lockdown is to blame.

Today, maintenance services have increased. A shortage of components needed for the repair also affects the final repair costs.

Supply chain issues

You may not have realized the extent of the damage caused by the pandemic. Due to the movement restrictions, countries had to shut down their factories, resulting in supply chain issues in the automotive manufacturing industry. For instance, the microchip shortage led to a production halt of over 4 million cars in 2022.

Moreover, car repairs take longer because some parts are harder to find than before. You may find yourself paying higher premiums for rental cars.

High healthcare charges

The Bureau of Labor Statistics report between October 2021 and October 2022 also found that healthcare costs increased by 5.4%, and the average person was forced to pay more by 20.6%. Car insurance companies cover medical expenses, so your personal accident insurance premium may increase.

Car insurance coverage selections

Your insurance choices could be the reason for your increased premiums. However, this shouldn’t discourage you from getting the coverage you and your loved ones need. Auto insurance is a smart investment, and it’s important to understand the types available:

• Liability car insurance– this coverage type caters to property damage, human injuries, and legal defense.
• Medical expense- this insurance covers your medical bills and other charges that crop up after a car accident.
• Uninsured motorist insurance- this coverage comes through in a pinch when the other party can’t pay your medical expenses after hitting you due to a lack of or insufficient liability insurance.
• Accident forgiveness- your insurer offers “forgiveness” after at-fault accidents.
• Roadside assistance- receive roadside assistance such as towing, flat tire support, and battery jump-start.
• Gap insurance- this insurance comes in handy if you have an existing car loan and your vehicle gets totaled.
• Collision and comprehensive insurance- this coverage caters to car repair costs, car theft, hail damage, and collision.

Coleman Insurance Agency Offers Affordable Car Insurance in Clearwater

There’s no doubt that every motorist requires auto insurance. Thankfully, homeowners need not worry about receiving hassle-free car insurance from a licensed and reputable agency.

We understand that your car is an investment, so our insurance specialists will review the coverage types to help you select one that meets your needs. Call our agency at 727-441-9911 to get auto coverage and homeowners insurance in Clearwater.