SAN ANTONIO – Car owners could be in store for a costly surprise when it comes time to renew their insurance.
According to officials with the insurance council of Texas, rate increases were expected to date back to a trend from 2018.
“If we think about a car from 10 to 15-years-ago a bumper was a piece of steel that was bolted to another piece of steel. Now you have plastic that’s over steel that has five sensors in it and a rear-view camera,” said Rich Johnson, the Director of Communications for the Insurance Council of Texas.
The Insurance Council of Texas Communication Director, Rich Johnson, told KSAT they expected the improved product of what’s on roadways to cost more. They didn’t account for the pandemic, supply chain issues, and labor shortages.
Supply chain issues cause problems such as getting parts for cars. Additionally, labor shortages make it harder to get employees to make certain repairs, all of which extend the time someone might have to drive a rental. These factors add to what an insurance company covers.
“This is something that we haven’t seen. This is something that’s different. In 2022 we saw about a 20% increase. I think it’ll probably be a little bit more in 2023… I don’t want to give a specific number because I don’t know it yet,” said Johnson
A study by research firm Valuepenguin states car insurance is expected to rise by 8.4% across the U.S. this year.
“I actually just bought a new car, and when I switched to new coverage, it actually went up to like double,” said Cameron Tabb, a man who recently switched insurance
Tabb said he only knew about the increased rates because of his new bill. Others like Jesse Arias have heard about it but haven’t seen it firsthand.
“Just another thing in life going up. I mean, everything’s going up in life right now. I mean, you’re talking about food, talking about outings,” said Arias.
Rich Johnson with the Insurance Council of Texas says people can try to save money by shopping around, and adjusting deductibles with the help of insurance professionals. If you have a student with good grades, report it, and see if a defensive driving course qualifies for a discount.
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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.