If you have a car, you probably pay monthly car insurance. It’s also possible that you’ve noticed that your auto liability premiums have skyrocketed in the past few years. You might be wondering why this is. Let’s go over the reasons why car insurance premiums have gone up so much recently.
Claim Payouts
Claim payouts for accidents are significantly higher than they were a few years ago, resulting in car insurance premiums being higher. This means that when an accident occurs, insurance companies tend to pay out more now than they did before. Even when an incident isn’t the fault of a company, they may still have to pay out a significant amount of money due to their liability.
More Claims
More auto insurance claims being filed means higher insurance rates for customers. The number of car accidents has increased in recent years, meaning that more people are filing insurance claims. Thus, insurance companies are paying out more. In fact, 2021 marked a 16-year high for traffic fatalities per year, meaning that insurance claims climbed starkly as well.
Cost Of Vehicle Repairs
After an accident, auto insurers pay to fix any damage done to their customers’ cars. As the price of vehicle repairs goes up, so does your auto insurance premium. The insurance company is paying more in the event of an accident, so it makes sense for you to pay more.
Vehicle repair costs went up by almost 12% between 2021 and 2022. These increasing repair costs can be attributed to a lack of qualified auto technicians and struggles in the supply chain. To illustrate the extent of the shortage, the demand for auto technicians doubled in the past year.
Those are just a few of the key reasons why car insurance premiums are more expensive than they were a few years ago. Other factors like the COVID-19 pandemic might also play a part in why auto insurance premiums have increased in cost.
If you’re ready to protect yourself and your vehicle for a reasonable price while working with industry experts with over 50 combined years of experience, look no further than Three Arbor Insurance. We are an independent agency with a passion for guiding you through every step of the insurance process. Get a quote today to get started!
