We hear this question quite a bit, and you maybe just caught yourself saying out loud – “Ya, why is that?!” There are several reasons we see this happen and I will try to bring some clarity to this question for you.
First off let me just say that I get it… It doesn’t seem fair. My rates have gone up too. And just like you, I haven’t had any recent tickets or accidents. Rates have gone up even more for the people who did have a ticket or accident.
Here are a few of the reasons rates have risen over the last several years. Like it or not, insurance rates are based both on the performance of the group as a whole, as well as your individual performance. Industry wide, across all carriers, we are seeing record high amounts of money being paid out by insurance carriers for bodily injury and property damage claims for auto insurance. This is taking place due to an increase in both Frequency (more claims happening) and Severity (the cost of those claims is higher than ever).
- Frequency: Distracted driving is an absolute epidemic in this country, causing so much harm to families and businesses. More accidents than ever are taking place.
- Texting – Both the drivers of cars, AND pedestrians! Folks are literally walking into streets, looking at their phones, not looking both ways…
- All the fancy features that the latest ‘palace on wheels’ vehicles come with are taking our eyes and attention off the road. Music playlists, getting map directions on the fly, text notifications, even searching Yelp for the nearest restaurant. All these distractions are causing countless accidents.
- Severity: The cost to pay claims has never been higher.
- Fixing people’s body parts. There’s no debate that medical costs have never been higher. This translates to higher auto claims, and thus, higher insurance premiums.
- Fixing vehicles has never been more expensive. What used to be $300 chrome bumper 15 years ago, now has cameras, sensors and lasers shooting out of it. Windshields have digital features. Technicians must be more specialized to work on these repairs. All this puts pressure on the cost of auto insurance.
- Legal environment – I’m sure we’ll get no kickback from saying again that the litigious ‘get rich’ nature of our society has a costly impact on the cost of auto insurance.
Given this information, here are a few things for you to consider.
- We know the average claim payout is going up (medical bills, expensive cars and attorney bills). Let’s make sure your current limits are high enough to provide you adequate protection. Will $100,000 go far enough to keep your own money in your checking account? Is it worth paying $20/month to get $250,000? Or to add a $1M umbrella?
- When it comes to keeping rate affordable, discounts are huge. Make sure you are bundling your policies with the same carrier whenever possible.
- Make sure your deductibles are as high as you can comfortably afford. Higher deductibles will reduce your cost.
- We know shopping for insurance is no fun, but it needs to be done every few years to make sure you are still in the best place. Let us do that for you. Part of our FirstMark Promise is to always keep you in a competitive position in the marketplace. The carriers we work with are all responsible and we don’t often see wild swings on renewal. We partner with you to keep an eye on rates and if it feels like the current carrier is no longer in a competitive position, we are able to shop the market and either confirm you are still getting the best value, despite the increase, OR we can move you to another carrier. And we do all the work for you, so you never have to shop it alone again.