Auto Rates Are on the Rise
Let’s hop to it. The past year we have seen record breaking inflation rates on practically everything in life: gas, groceries, materials to build, housing, car sales and the list, unfortunately, continues for pages. Every industry is being hit by increasing prices, and the auto industry is no different. This upcoming year, you may see your auto premium increase. But before you freak out, here are a few things to consider.
1. Did I or someone on my policy have an accident or traffic violation? Insurance companies take your renewal as a time to review your policy and that includes re-running reports to determine if you are a high risk customer. If you had an accident or traffic ticket, this will contribute to an increase in your premium as you will be surcharged for each offense. The percentage of the premium increases will vary by state and carrier.
2. Did I recently purchase a new vehicle? We all love an upgrade! Maybe you traded in your 2006 Pontiac Coupe for a 2022 Chevy Equinox that comes complete with extra safety features including lane departure notifications and blind spot warning technology. There are discounts that some insurance companies offer for these, but with the discounts now comes a higher replacement cost to those parts should they be damaged. Smarter cars equal smarter tech which equals more money to fix.
3. Did I change any of my coverages mid term, including adding a driver? We’ve seen a lot of teens recently take their driver’s test and get their license. Adding a driver, and especially a youthful driver, is not always fun to your pocketbook. Did you increase any coverages? Check that declarations page friends!
4. 2020 was the year of staying home. Less people on the roads going to work and school meant less accidents, and many insurance companies gave their drivers refunds for it. 2021 we may have gone a little crazy and yelled, “FREEEEEDDDOMMMMMM FINALLLYYYY” as we zoomed out onto the roads to new adventures that weren’t just for work. Excited to leave our homes and journey farther than the grocery store. This time around, more people equates to more accidents which in turn yields to more claims that were paid out, hence, the increase to mitigate the losses.
So what can we do moving forward? The first thing most people want is to lower the premium and we take that chopping knife straight to your liability limits. I encourage you to PUT. THE. KNIFE. DOWN. Your liability limits are one of the most important parts of your policy. If you have low coverages and you run out of policy to cover a person/vehicle you hit, they could come after you personally and your future earnings. Being underinsured is not the way to go friends! Maybe check on your deductibles. Low deductibles on comprehensive and collision coverages tend to yield a higher premium. Make sure your mileage is accurate. Are you still working from home? Check with your rep to make sure you’re not being charged for driving 11 miles to work, rather more like 11 steps to the kitchen pantry for some Girl Scout Thin Mints. Are you getting all the available discounts including paperless? Each carrier offers multiple ways to save without sacrificing coverages so check it out!