Auto insurance rates are rising across the country, with some people paying 20% more this year, according to a Wall Street Journal report.
The rate increases are the result of two key factors, the newspaper reports.
As you might expect, inflation is one of the drivers of rising costs. Insurers are turning to state officials and trying to get permission to charge higher rates “for what they believe is more sustained inflation,” according to the WSJ.
The cost of auto repairs and vehicle replacements has increased significantly over the past two years. In addition, shortages of auto parts and body shops sometimes force insurance companies to provide longer rental cars to policyholders whose vehicles are damaged.
Another factor driving higher premiums is an increase in serious car accidents. Last year, the number of road deaths was higher than at any time in the past 16 years.
Many consumers are already seeing premium increases when they renew their policies. But the increases vary from place to place.
The WSJ notes that states such as California have been reluctant to approve price increases. However, in many other places, rate hikes are underway.
Elyse Greenspan, an analyst at Wells Fargo Securities, told the WSJ that from mid-2021 to now, auto insurers have secured increases on about 61% of personal auto insurance premiums.
If the thought of another higher cost makes you cringe, see if a company like The Zebra can get you a lower rate.
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For more on The Zebra and other ways to save, check out “7 Clever Ways to Fix Your Finances in 10 Minutes (or Less).”
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