If you’ve been wondering why car insurance costs are going up, you’re not alone. Auto insurance rates have been on the rise in recent years, with the most recent Consumer Price Index Report from the Bureau of Labor Statistics showing a 22.2% increase in motor vehicle insurance costs from March 2023 to March 2024. We recognize that rising insurance premiums can be frustrating, so here we offer insights into why rates are rising across the industry and provide tips on how you can save money on your auto insurance.
What’s Causing Rising Rates?
Risky Driving Habits
The prevalence of risky driving habits, such as distracted driving, impaired driving, and speeding, results in increased injury and claims costs, driving up the cost of insurance. Data from the National Highway Traffic Safety Administration indicates that although the number of fatalities in motor vehicle accidents decreased from December 2022 to December 2023, the total fatalities for 2023 remain higher than pre-pandemic levels. These trends highlight the ongoing impact of risky driving habits on road safety and insurance costs.
Increased Repair Costs
The increasing costs of vehicle repairs contribute to higher auto insurance rates. The latest Consumer Price Index Report shows an 11.6% increase in motor vehicle repair costs from March 2023 to March 2024. This is driven by inflation and the complexity of modern vehicles’ technology and safety features. As these repair expenses climb, insurance companies are faced with higher claim payouts, prompting adjustments in rates to accommodate the rising costs.
Severe Weather Events
Severe weather events such as wildfires, flooding, and storms pose a significant risk of property damage, contributing to increased costs of auto insurance. According to the National Centers for Environmental Information, the frequency and cost of weather-related disasters in the U.S. have been increasing. In 2023 alone, there were 28 separate weather disasters causing damages exceeding $1 billion each. This record number of billion-dollar weather events, when compared to inflation-adjusted data since 1980, highlights the growing impact of severe weather on insurance costs.
How Can I Save Money?
Review Coverage Needs with Your Agent
Regularly review your insurance coverage with your agent to ensure it aligns with your current needs. This will give you the opportunity to adjust your policy as necessary to avoid overpaying for unnecessary coverage while ensuring you maintain adequate protection against potential risks.
Bundle Policies
Consider bundling your auto insurance with other policies, such as home or renters’ insurance, to qualify for our Multi-Policy Discount. Bundling not only saves you money but also offers the added convenience of having your insurance policies with the same company.
Maintain a Good Driving Record
Safe driving habits can lead to lower premiums, so drive responsibly to avoid traffic violations and accidents. Ask your agent about our safe driver discounts as an additional way to save on insurance.
Review Your Payment Plan and Go Paperless
Check with your agent to see if updating your payment plan could lower your premium. Additionally, enjoy an extra 5% discount on your premium by opting for paperless statements. These simple adjustments can help you save money and reduce paperwork hassle.
At Farm Bureau Insurance Company of Idaho, our agents are committed to addressing your questions and exploring every option to offer you dependable coverage at competitive rates. While certain factors impacting the insurance industry are beyond our control, it’s our mission to provide you financial peace of mind by protecting what matters most. If you aren’t a customer yet, reach out today to get a quote.
Disclaimer: The information included here is designed for informational purposes only. It is not legal, tax, financial or any other sort of advice, nor is it a substitute for such advice. The information may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate in parts.
