During the heart of the pandemic, drivers were getting a break on their car insurance. Prices were at their lowest, which was ideal for many during such a trying time. However, those days are gone. Most of life is going back to normal, which means prices are going back up for car insurance. Not only are the prices rising back to what they were, but prices are also getting even higher. Here’s what you need to know about auto insurance rate hikes.
Location
How high your auto insurance rate is rising depends significantly on where you live. The average cost of auto insurance as it stands right now is $1,655 per year, but due to an increasing number of accidents and inflation, those costs are going up in certain states. For example, in Texas, some insurers are planning on making a 20% increase in their rates statewide. In Arizona, rates rose by 8% for Geico. In addition, rates for Allstate, StateFarm, and Progressive are moving to raise rates by 4.8 to 12% in Illinois.
Louisiana, Michigan, and Florida are among the highest rise in auto insurance rates. Average rates have gone up to $3,265, and some drivers have reported rates rising as much as 35% in Louisiana. Location determines auto insurance rates greatly because insurers must consider traffic volume, accident and claim rates, and things like theft and vandalism data. This makes national averages more obsolete than they would be for other industries.
Lack of Adjustment
As inflation has risen, auto insurance premiums have failed to keep pace, especially regarding auto replacement part costs. The Insurance Information Institute (III) has noted that claim payouts have been higher due to the higher replacement costs of parts as insurers watch the severity and frequency of automobile accidents increase. U.S. auto insurers spent nearly $1 on claims and expenses last year for every $1 they collected in premiums, according to the III.
In short, traffic is ever-increasing these days as many people get back on the road after the pandemic. We at Arthur Blake Insurance know it’s pertinent for some to be on the road, even for things like grocery shopping, work, or taking the kids to school, so you need auto insurance despite the price spikes. We’re here to help you with that. Arthur Blake Insurance has experts who can walk you through everything you need to know about rates, coverage, and more, so if you’re looking for auto insurance, Arthur Blake is a great place to start. Contact us today to set up an appointment with one of our agents.