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2 Reasons Why Insurance Companies Are Raising Car Insurance Rates

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Frustrated woman counting money to pay her car insurance.
Have you noticed a big increase in your car insurance premium on your last one or two renewal bills? Read on to discover the 2 major reasons why your bill may be going up and what you can do to reverse that trend

Just like the price of gas, building materials, food and just about everything else you can think of, auto insurance rates are continuing to rise. Unfortunately, even for those who have not had any accidents or tickets, their premiums are rising too as we all share in absorbing large insurance company losses of late.

Rate And Severity of Accidents

The rate and severity of accidents has continued to rise over the past several years, even throughout the pandemic shutdown when there were less cars on the road. Whether it be due to distracted driving and the use of cell phones or people in general not paying attention to the road as they once did, the trend of a higher volume of claims has put financial stress on the auto insurance industry.

Cost of Auto Claims Rising

Whether it be the cost to repair or replace a vehicle or a bodily injury claim, the costs to satisfy claims has taken a sharp increase over the past year.

Most people are aware that the cost of both used and new vehicles has skyrocketed over the past year right along with the cost of car parts.  NY insurance companies were collecting premiums based on the cost to repair or replace a vehicle based on the pre-inflation numbers so most if not all insurers have been losing money on their auto insurance products so there’s been a massive move by most insurance companies to raise rates at each renewal period, sometimes with significant increases in premium.

Besides the costs to satisfy physical damage to vehicles, the costs of bodily injury medical and liability claims has experienced a continued climb as well.

As many insurers remain on the wrong side of profit on their auto products we can unfortunately expect to incur premium increases above normal for some time into the future.

What Can You Do To Lower Your Premiums?

One of the best ways to lower your premiums is to get a NY car insurance quote through an independent insurance agency, one that is appointed to several different insurance companies. They can do the shopping for you and in many instances there are newer programs out there for which you will rate better for based on your current qualifying circumstances.

Also, make sure that you are getting all of the discounts that you currently qualify for, especially if you have a young driver on your policy. Discounts such as good student, student away at college and defensive driver certification.

Many people have kept their car insurance with the same insurer for five or more years and not really experience major premium hike other than normal cost of inflation increases. It doesn’t happen often, but the insurance world is now in what’s call a hard market with tightened underwriting guidelines and what seems like an uncontrolled cost to cure claim environment. But the good news for many that are experiencing a major increase in their NY auto insurance premiums is that there are companies that are pricing well for those with a good claims and driving record history, especially if they bundle their home insurance with auto. It’s worth a look if you find yourself in this position.

If you have any questions regarding auto, home and business insurance options, please contact us, we’re always glad to help.  The NY Insurance Hub serves Albany, Schenectady, Troy, Latham, Cohoes, Watervliet, Clifton Park, Saratoga Springs, surrounding Capital Region areas and all of New York State from NYC to Buffalo.

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