Auto Insurance Rates are Now on the Rise
Now that the country’s economy is improving, it resulted to job growth and reduced gas prices. And all these factors led to Americans driving more. In fact, the most travelled year in history is 2015 with 3 trillion miles increase compared to 2014. This is around 3.5% increase as per U.S. Department of Transportation. With increased miles, more accidents will also follow. Everything has a domino effect which includes increased insurance claim cost.
“Everything will be more costly. This includes the amount of claim settlements, medical costs, litigation cost and even auto repair”, Jean Salvatore; Insurance Information Institute vice president said.
Joan Schmit; University of Wisconsin-Madison chair of risk management said; “All the expenses will be passed by insurance companies to you as their consumer. This results to increased auto insurance premium as well”.
The said auto insurance increase was validated by the Auto Insurance Consumer Price Index of the federal government when it revealed that there were price increases every month this year. And if you have not felt any change on the rate of your auto insurance yet, Schmit cautioned that it will be coming soon, so be prepared. “Insurance companies are only allowed rate change every 6 months. On top of that, the increase must be approved by the state regulators. Hence, the increase may take a while”, Schmit said.
The said hike can be significant and you will know this on your next renewal. Hence, car owners are encouraged to save and prepare for such change.
One way to save is to shop around for the best offer. According to Salvatorre, getting the best offer may allow you to save several hundreds of dollars in a year. Hence, to be able to choose well, it is your duty to know the company’s type of coverage as well as the exact amount that you will need to pay. Without this information, you won’t be able to compare one insurance company to another.
But according to Schmit, you must not decide basing on the price alone. “The company’s reputation showing that they are financially solvent will assure you that they can pay your claims whenever you need it”, she said. Hence, she suggested that it will be best to include the company’s financial standing in your research.
Also, don’t forget to ask for discounts. If you have taken a defensive course, have paid your auto insurance in full and have installed an anti-theft device to your vehicle, you have more chances of paying lesser for your premium. Moreover, you may also save in your premium if you have been with the same insurance company for many years.
The increase of car insurance rate is something that can be beyond your control but there will always be some ways for you to save a little bit more.