Why Auto Insurance Costs Are on the Rise

It seems like everything is getting more expensive these days, and that includes auto insurance. According to a recent study by the National Association of Mutual Insurance Companies, there are many reasons why this is happening. Here are five of them:

More drivers. The U.S. population has grown 10% over the past decade, bringing the number of licensed drivers to 230 million. More drivers equal more auto accidents—there are over 6 million crashes a year, and that number continues to climb.

Driving behavior. People are driving faster, and speeding increases the severity of accidents when they happen. Drivers are also facing more distractions than ever before, with nearly 1/6 of crashes caused by distracted driving. And, despite the use of ride-sharing services and education about the risks of impaired driving, 10,000 lives were lost in 2019 due to driving under the influence.

Inflation. With new technology, modern cars are safer than ever, but high-tech vehicles are more expensive to repair. The average cost of a car repair has risen 8% since 2019. Additionally, hospital services have climbed over 46% since 2010.

Extreme weather. Bad weather can lead to accidents, and cars can also be damaged by natural events, especially when parked on the street. Auto claims due to weather and natural disasters are up 4% over the last decade.

Theft. In 2020, auto thefts increased by 9.2%. Each year, fraud costs insurance companies billions of dollars in loss as well.

Acuity works hard to keep insurance costs under control. We work closely with repair shops and were named a top company for claims service by them! We also offer Replacement Benefits Coverage on cars, so you don’t have to worry in the unfortunate event you have an accident. Additionally, we returned millions of dollars in rate relief to our personal auto customers through discounts during the COVID pandemic.

Talk to your independent agent annually to do a full review on your auto insurance policy.