Auto Insurance Costs Grow Twice as Large as the Inflation Rate

Studies show that auto insurance rates have increased dramatically in the past few months. In fact, the rate of growth has even surpassed the rate of inflation by twice the percentage. The reasons attributed to this increase include heightened losses and reduced underwriting profits for auto insurers. However, it is the consumer that has to pay up for these reducing margins.

Just last year, the national average auto insurance rate in the US hit $1427. Currently, it is hovering around $1502. Among other factors, the massive damages incurred through natural disasters played a big role in driving up the rates. These growing insurance rates have especially affected the low-income vehicle owners who find it hard to purchase state-mandated insurance.

According to reports auto insurance rates have increased by over 20% since 2011. Many reasons have been attributed to the insurance companies losing on their margins and being forced to increase the rates. While unprecedented natural disasters are one reason, increase in distracted driving accidents is another one. The NHTSA reported that while 2.217 million people were injured due to distracted driving in 2011, the figure was 2.443 million 2015.

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In a scenario where insurance rates continue to increase, consumers seeking more value are now looking for the best car insurance deals to save money. Such deals help consumers lower their insurance premiums without having to compromise on the coverage.

Increased vehicle repairs costs have also prompted insurers to push up the rates. The integration of new more expensive and sensitive electronics technologies in vehicles can be one contributing reason. For example, backup cameras were made mandatory in May 2018 by the NHTSA.

If the loss-causing factors continue to increase, it is expected that auto insurance costs will also keep increasing. With global warming and deteriorating weather conditions, at least one factor is expected to contribute to this trend. In such a scenario, there is very little that consumers can do, but to comply with the regulations.



This release was published on openPR.