SPRINGFIELD, Mass. (WGGB/WSHM) – Lately it seems the price of everything is going up and now we’re starting to see complaints over significant increases in car insurance premiums.
Western Mass News spoke with a past chairman of the National Insurance Association and current broker right in Springfield. He told us right now rates are at unprecedented levels and he has a pretty good idea what’s to blame.
“Yeah, everything’s going up after COVID everything spiking everything everyone just trying to get their revenue back up and stuff,” said one customer.
A complaint many of us know all too well and now it seems yet another necessity is being added to that list, car insurance.
One reason for that of course is inflation…
John Rogers, Professor of Economics at American International College in Springfield describes the current state of the economy as a paradox.
“I think President Biden is struggling with is he saying hey unemployment never been lower the stock markets doing well, the dollar strong it sounds like the economy is in great shape, but then you ask people and they say well yeah I go to the grocery store and I can’t afford it I just got hit with a 10 or 15% increase on my car insurance my homeowners insurance and my renters insurance is going up so people are struggling with the day-to-day life,” explained Professor Rogers.
Western Mass News caught up with the President of Leahy & Brown Insurance & Realty, Joe Leahy who told us right now insurance companies are in what’s called a hard market, where premiums keep going up and up with no end in sight. However in over 40 years this is worst he’s ever seen, adding the cost of materials is to blame.
“There are brackets that hold onto the front of a car three years ago,” noted Leahy. “The companies are paying $900 each for them for each bracket now they’re $2600 for each bracket.”
Those higher prices along with supply chain issues is starting to trickle down to other areas.
“It takes longer for cars to be repaired because they can’t get the parts in in a normal manner,” expressed Leahy. “Then they used to get them in so as a result of it the car rental cost has gone up because cars are being rented longer while people wait for the parts to get the car fixed
Leahy explained the problem insurance carriers are experiencing.
“They never saw this coming therefore it wasn’t reflected in the rates,” said Leahy.
So, now he said insurance companies are forced to raise premiums to be able to pay for these expensive claims and with added safety features in cars, this can also increase the severity of accidents in terms of cost.
“A 1999 Honda Accord rear bumper has five parts in it. It would cost maybe four to $500 then roll up to 2010 there may be 12 parts in it and the cost is doubled three years ago there’s over 30 parts and that bumper now and the price is over $3,000,” explained Leahy.
Now Leahy advises customers to purchase accident forgiveness and to also rely on their independent agent to shop around for them to get the best deal.
Copyright 2023. Western Mass News (WGGB/WSHM). All rights reserved.
Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.