The domino effect driving up your premiums – WFTV


Car insurance: the domino effect that drives up your premiums Cars in minor accidents are totaled more than ever. (WFTV)

ORLANDO, Fla. — Some Florida drivers are shocked by the stickers when they see their latest auto insurance renewals, and those who aren’t already paying more to insure their cars may soon.

When the COVID-19 pandemic hit, people weren’t driving to work as often.

Many roads were empty and drivers had insurance discounts, but all that has changed.

“Today, with so many more vehicles on the road, obviously that’s going to create more accidents,” said Diana Giron of Universal Insurance Agency.

She said the end of working from home for many could be part of that, but there are also many people commuting to Florida every day, adding to the increased traffic.

Giron said the main factor affecting insurance rate hikes is the cost of auto parts.

Read: Florida homeowners face property insurance rate hikes; here’s why

Supply chain issues caused by the pandemic are making parts harder to find and therefore more expensive.

“Let’s just say (a) vehicle is in an accident, then that vehicle to fix it, fix it properly – if you can get the parts, if you can find the parts – is now going to cost $5,000 more.

That’s $5,000 more than before the pandemic.

Orlando City Auto Body told Channel 9 it saw auto parts prices start to rise last year.

Read: ‘I freaked out’: Florida homeowners stunned by rising insurance costs

Now the labor costs of repairs are also increasing. New cars are also rare, driving up the cost of used cars.

Cars that are worth more cost more to insure.

Giron said a vehicle worth $10,000 before the pandemic could be worth $17,000 after the pandemic.

This creates a domino effect.

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Driver Rustina Gibson said she had a minor accident and was initially told it would take several weeks to repair her vehicle.

She later found out that the insurance company decided to total it up because the cost of repairs was too high and the time to fix it would have taken too long.

“I didn’t want it to be total,” she said. “I wanted it fixed. And I kind of fought them off saying, ‘Why can’t you fix it?’ “

Gibson then had to buy a used car, which cost her much more than her previous vehicle and was more than she received in insurance money.

She said she expects her insurance premiums to go up.

Giron said she expects the same for many other Central Florida residents, with some rates increasing by as much as 20%.

“It costs more to insure and everyone is frustrated,” she said. “I feel for them, because it happens to me too.”

The increase may depend on factors such as the driver’s zip code.

Giron said some in the insurance industry believe rates could come down towards the end of the year as they expect a chip shortage to be resolved, allowing more new cars to be built.

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