By ALLEN MCQUISTON
Jemez Insurance Agency
Serving Los Alamos Since 1963

Why Are Car Insurance Rates Going Up?

There are many reasons for the current auto insurance rate increases across the market. Here are some of the notable ones.

Severe Accidents

There was a rise in the severity of automobile accidents between 2020-2022. In fact, fatal car crashes were up 15% in 2022 as compared to 2020.

Increased Vehicle Value

Another contributor affecting the auto insurance market: the value of most vehicles — both new and used — increased while supply decreased. As of September 2022, used car and truck prices went up 7.2% and new vehicle prices were 9.4% higher when compared to September 2021.

More expensive cars (and parts) also make repairs and replacements costlier. When comparing November 2022 to November 2021, bodywork costs rose 12% and repair costs grew by 15%.

Vehicle supply dropped in large part because key materials like semiconductors, which are needed for the computers found in cars today, experienced a manufacturing interruption in recent years. Although manufacturing has resumed, the supply for some vehicle manufacturers still runs short of demand.

Additional Factors That Could Impact Auto Insurance Rates

Other factors not related to national and global events that could raise auto insurance rates:

• If you’ve made claims on your policy in the last year.
• If you or anyone on your policy received a speeding ticket or other driving citations.
• A higher number of claims in the area you live in indicates there may be more accidents related to weather changes, higher theft rates, more incidents of vandalism or other issues the insurer must cover.
• If you moved to a higher-risk area than you previously lived in.
• You may have taken advantage of insurance discounts in the past that you no longer qualify for.

What You Can Do to Reduce Your Insurance Rates

While some insurance price increases are out of your control, there are things you can do to help get them in check:

Practice safe and sound driving habits. Make sure everyone on your policy follows all the rules of the road and drives carefully, especially in difficult conditions and bad weather. This will help avoid tickets and accidents that could hike up your premium prices.

Sign up for telematics. If you and the people on your policy drive safely and carefully, why not use it to save money? Telematics collects information about your driving habits in real time. By enrolling in a telematics program, you could save on your car insurance policy’s first term. At renewal, safe driving habits can lead to savings, though riskier driving habits may result in a higher premium.

Change your preferences to be a digital customer. There can be a reduction in premiums if you engage digitally. These savings are given when you enroll in a paperless option for policies and bills and register with the carrier’s application.

Review coverage. If you haven’t checked your auto insurance and other coverage lately, review it with your insurance agent. They might offer some ideas on how you can make your coverage more affordable.

Raise your deductible. Often, increasing your deductible can help lower premiums. However, remember that you’ll be responsible for the deductible out of pocket and must always have enough cash on hand to cover your deductible if you need to make a claim.

Look for discounts. Check to see if you’re eligible for discounts like multi-policy (bundling), EFT (Electronic Funds Transfer)† or Good Student. Your insurance agent can help you find ways to save.

For more helpful articles, visit us at www.thejemezagency.com