If you recently opened your car insurance bill and noticed it’s higher than you expected, you’re likely to experience the increases in insurance rates that are being made by most insurance companies at the end of 2022 and into 2023. Insurers are raising their rates in response to significant changes in the marketplace.
To answer your questions about these changes, we’ve put together an insider’s look at why your car insurance premium might go up.
Why did my car insurance go up?
Several unprecedented changes are driving up car insurance rates, the first being the increased cost of car insurance. This increased damage cost is largely due to:
- Increased severity of car insurance claims
- Price increases for spare parts
- Access to spare parts
- The workshops are short staffed
- Repairs take longer, which increases the overall cost of renting a vehicle because you may need it longer
There is also a shortage of new and used vehicles. Because of these flaws, prices to replace a vehicle have increased significantly, making totaled car claims much more expensive.
Of course, we cannot forget inflation. Just like many other industries right now, inflation drives up prices.
How much can I expect my car insurance to go up?
The amount your auto insurance will increase varies by state and depends on your policy. There is no fixed percentage that all insurance companies increase. The adjustment is based on the price increases they have seen in their claims and adjustments for inflation. All rate changes must also be approved by your state’s insurance department.
What if I didn’t make any claims?
Filing a claim may affect your rates. But this particular rate hike will usually be more heavily motivated by the drastic changes in the market.
Should I change insurance?
Seeing your interest rate increase may raise the question of switching insurance companies. Since this is a change that affects the entire insurance industry, the prices may not be that much different. However, it never hurts to check.
Your local Bolder insurance advisor is a great resource and can help you compare quotes from multiple insurance companies to find the coverage and pricing that is best for you.
While it’s tempting to switch to achieve the lower price tag, make sure you check the insurance company’s service ratings, coverage options and limits. This is especially important today, as repairing and replacing a vehicle is much more challenging. Switching to an insurance provider that has a lower rate but also lower service ratings or coverage limits can leave you feeling confused when filing a claim.
We know it’s hard to see an interest rate increase that is both unexpected and out of your control. But all the rapid changes in recent years have made it a necessary step. For more information about the rate increases you are seeing, contact your local, independent Bolder Insurance Advisor.
This article compliments of Auto-Owners Company, a Bolder Insurance partner.