SIOUX FALLS, S.D. (KELO) — People out shopping for a new car this summer are not only facing higher costs for vehicles, but auto insurance is also now seeing some major increases.
“Across the board, every insurance company is taking rate hikes because they’re based on pricing a couple of years ago,” State Farm Agent Ryan Reiner said.
Auto insurance rates are regulated by the State Department of Insurance, so any increases do take time, but now those increases are catching up with customers at sometimes alarming rates.
“We’re seeing anywhere from 8 to 40 percent rate increases across the industry,” Reiner said.
It’s how the insurance industry is working to cope with the rising cost of vehicles and repairs, especially as a shortage of parts and rental cars after the pandemic is greatly increasing the cost of insurance claims.
“The body shops are really backed up, we’re talking 10 to 12 weeks to get an appointment scheduled to get a car repaired and then if you need specialized parts they’re waiting even longer for that. So what used to take a couple weeks is now taking a couple of months,” Reiner said.
Auto insurance also covers the cost of injuries during crashes, another field that has seen some major inflationary increases over the past two years.
“One part that’s really causing pressure is higher medical costs, so not only is the repair on the car costing more, but when people get hurt the medical costs are continuing to go up,” Reiner said.
It’s why consumers are now facing such large increases in their insurance premiums, prompting more people than ever before to start shopping around for insurance rates.
“We had our highest quote volume for new customers last week in our 12-year history, so definitely people are out looking to save some money and to make sure they know what they’re getting,” Reiner said.
Other ways you can look to save on your insurance premiums are bundling with your home or other insurance policies, asking your current provider about discounts and opting for telematic software to monitor your driving to give you your individualized rate that rewards you for being a good driver.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.