These days, it seems as though everything is more expensive. From food costs to rent, chances are we are all feeling the impacts of inflation. Pretty soon, there will be another increase on a major expense. Car insurance rates are expected to increase across the U.S. by 8.4% this year, according to Value Penguin. Insurance premiums are predicted to go up by $101 in California, making the new average $2,291, according to a study by Bankrate.
Insurance companies have been granted rate increase approvals following the coronavirus pandemic, when they complained they were losing money as people stayed off the roads. So far, 20% of the insurance market has been receiving these rate increases. Geico, Mercury, and Allstate have increased by 6.9%, while smaller insurers have increased as much as 20%.
According to president of ConsumerWatchdog, Jamie Court, more rate hikes are coming soon. "We're talking about hundreds of dollars per person, and we're also talking about 20% of the market has now had rate hikes. So we have about 80% of the market that are asking for rate hikes."
The reasoning behind this steep increase? Inflation is only one variable. Rising costs of parts and labor, higher amounts of accidents, vehicle thefts, and an all-time high number of personal injury judgments are all to blame. Wildfires and supply-chain disruption have also been named contributing factors specific to California.
The increase in your insurance premium may be inevitable. However, there are a few steps consumers may be able to take to save as much as possible.
Compare pricing. Research the pricing of coverage packages for multiple companies so you can pick the most cost-effective option.
Bundle coverage. Many insurance companies offer a discounted rate if you choose to bundle auto and homeowners or renters insurance.
Consider your deductible. If you have a substantial emergency fund, it may be worth considering paying for a plan with a higher deductible, lowering overall monthly costs.
Mileage matters. The number of miles you drive impacts how much you pay for insurance. If you are driving less than you were when you bought your policy, be sure to make your insurer aware.
The best way to reduce your rising premium? Practice good driving habits to avoid getting into an accident. This includes allowing yourself extra time to get to your destination, following speed limits, avoiding using your cell phone while driving, and paying close attention to the road at all times.
Despite the rising costs, it is important to ensure you are enrolled in car insurance. Not only is it the law for drivers in California, but it also protects you against extreme financial loss in the event of an accident. With more drivers on the roads and with reckless driving behaviors becoming increasingly common, car accidents are at an all-time high. Should you ever find yourself the victim of a car accident, MVP is here to help. Our legal team can help guide you through the aftermath of your accident and help you recover the cost of associated damages. Contact us today to schedule a free case evaluation.
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