A man driving his car.

Why auto insurance rates are going up

Reasons behind rising car insurance premiums and ways to help manage them.

Everything seems to be getting more expensive lately, and auto insurance is no exception. Here are a few reasons why auto insurance rates are going up, along with what you can do to help manage your rates.

Some reasons for an auto insurance rate increase

Driving habits changed during COVID-19 and after

During the COVID-19 pandemic, federal and local governments enforced shelter-in-place and social distancing guidelines. We then saw fewer accidents and less expensive losses. After COVID-19, people returned to their pre-pandemic driving routines.

As a mutual insurance company, State Farm® has the flexibility to react to changes we experience, such as in 2020 when State Farm returned premium to auto customers during the beginning of the COVID-19 Pandemic. However, as loss severity continues to rise, auto insurance rates will increase.

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Rising car repair costs

Inflation, supply chain disruption and labor issues caused by the COVID-19 pandemic have impacted vehicle repair costs and, on occasion, how quickly you can get repairs completed. Additionally, new technology, such as parking sensors, lane-departure warnings, and better battery technology, particularly in electric vehicles, have added to the rising cost of repairs. While those smarter sensors and stronger devices can help improve safety, they are also more expensive to repair.

Increased accidents due to distracted driving

According to a State Farm survey, more than half of drivers said they read or send texts while driving, and 56% of drivers report using video chat or recording video. Even voice-activated car commands can divert cognitive abilities and attention. Rethink using the phone while driving, and avoid being tempted by other driving distractions. If you have a teen, be sure to talk with them about safe driving habits. Especially since teenagers make up a large portion of distracted drivers involved in fatal crashes.

Ways to manage the rate increase

A Personal Price Plan™ helps you create an affordable price (just for you).1 Check with your State Farm agent about possible ways to save on your bill.

1 Prices are based on rating plans that vary by state. Coverage options are selected by the customer, and availability and eligibility may vary.

2 Discounts may exceed 30% and vary state-to-state (NY capped at 30%). Not available in CA, MA, RI. A discount may not be available in NC depending on individual facts and circumstances. Setup required.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

State Farm Mutual Automobile Insurance Company
State Farm Indemnity Company
Bloomington, IL

State Farm County Mutual Insurance Company of Texas
Richardson, TX

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