Inflation Impacting Auto Insurance Rates
Car insurance rates have gone up in recent years. With rates rising, insurance customers may be wondering why their premiums have increased, even with safe driving records. At Hembree Insurance Agency, we here to help you understand the ins and outs of your auto insurance policies.
Why Are Auto Insurance Rates Rising?
There are several reasons why you may be seeing an increase in your auto insurance rates this year. In addition to filing claims, which may cause an increase in your rates, inflation, supply chain disruptions and changes in driving habits are affecting rates for drivers everywhere.
If you’ve noticed a rise in your rates, the following factors could be affecting your premium:
Inflation. According to Bankrate, inflation impacted the new and used market, with the price for new cars and trucks rising by 11.8% last year. To keep up with the rising car values, insurers are raising rates across the board.
Supply chain disruptions. Fewer people have been on the road due to shutdowns related to COVID-19. This means there was less of a need for vehicle parts. Once people began to return to the everyday habits of driving, there was an increased demand without an increase in supply, causing a massive shortage nationwide. With these disruptions, ordering auto parts for repairs has become more expensive, and it takes longer to get parts in for repairs. Consequently, the overall cost of auto claims is increasing, leading insurers to raise rates to offset the overall rise in costs.
Labor shortages. Along with supply chain shortages, it’s been harder to find skilled labor. In the last few years, many workers have not only quit their jobs but changed career paths. This has left many jobs with shortages of employees. Labor shortages are creating costlier claims due to the cost of repairs going up and labor being harder to find.
Driving has become more dangerous. The National Association of Insurance Commissioners has labeled the last few years of driving as an epidemic of distracted driving. Distracted driving has been rising for years, with phone use being the most common distraction. Distracted driving can raise your rates because the more distracted you are, the more likely you will get into an auto accident.
It’s important to remember that each policy’s rates could be rising for different reasons. Be sure to discuss your rates with an agent.
Get Started With Auto Insurance Today
If you have questions about your auto insurance rates, or if you want to get started with an auto insurance policy, contact Hembree Insurance Agency today.