You probably do not smile when you pay your bills. You may be thinking about how these dollars can send you to Cancun or Punta Cana.
If you are in a special mood, you can call or email to find out why your car insurance prices went up. According to Forbes, the consumer price index (CPI) for car insurance has increased by 21.5% since 2012, which is the largest five-year growth in car insurance costs since the early 1990s.
If you are wondering what caused such an increase in prices, keep reading to discover why your car prices are rising and how you can keep them lower.
More cars = More accidents = Higher costs
According to Statista, the number of registered vehicles has increased every year since 2010, when there were almost 250 million registered vehicles in the United States. There were approximately 269 million registered vehicles on the road in 2016, the most recent year with available data.
There are more car accidents because there are more cars on the road, and car accidents cost more than ever.
Hospital bills will be much more expensive if a wreck leads to injuries. According to the Bureau of Labor Statistics, the cost of medical services has increased by 12% since 2012.
Car repairs cost more than ever. Vehicle technology continues to evolve with features such as parking assistance, lane departure warnings and spare cameras. This technology gives drivers lots of convenience, but it comes at a price. Vehicle repairs cost almost 61% more in 2017 than they did in 2000.
Distracted driving is another reason why car insurance prices are rising. Studies have shown that the human brain is horrible at multitasking, so you put yourself at risk when driving a car and texting, calling, eating or adjusting the sound system.
Organizations such as the National Highway Traffic Safety Administration (NHTSA) and the National Security Council are fighting distracted driving with awareness campaigns. Unfortunately, distracted driving led to 3,450 traffic deaths in 2016 and 391,000 injuries in 2015.
Extensive car coverage poses several risks, including natural disasters. In 2017, 16 separate natural disasters in the United States caused damage worth $ 306.2 billion.
In 2013, Hurricane Sandy led to 54,642 car claims in New Jersey with insurance companies paying out $ 530 million to auto repair shops.
Recurring extreme weather events such as floods, hurricanes and tornadoes can lead to higher car insurance rates for customers in affected regions.
The number of uninsured drivers in your area
You want protection if another driver causes an accident but does not have car insurance. Your car prices may increase if you live in an area with a higher concentration of uninsured drivers. According to the Insurance Journal, the proportion of uninsured drivers varies by state with Florida having the highest percentage of uninsured by 26.7%.
How to keep your prices lower
Although some factors are out of your hands, you can take the following steps to keep your prices lower:
- Monitor your available discounts such as car / home packages and multiple vehicles.
- Give up your lead foot. Drivers get better prices if they do not have a speeding ticket.
- Ask for a higher deductible. While this may help you lower your prices, it will also increase the amount you are liable to pay in the event of a claim.
- Before you buy your next vehicle, see how much it costs to insure it. This is determined by repair costs, probability of theft and security results and records.