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
- Drive Safe & Save™ puts you in control of your premium by leveraging driving data to customize your own personal discount.2
- Take advantage of other applicable discounts, such as Multiple Line Discount, Steer Clear® Safe Driver Discount for drivers under age 25 and the Good Student Discount.
- Evaluate how increasing your deductible or decreasing coverage on older vehicles could reduce your monthly premium.