The Rising Cost of Auto Insurance

by | Mar 29, 2023 | Auto Insurance, Personal Insurance, Personal Risk

These days it feels like the cost of everything is increasing and if you have received your insurance renewal recently, you may already know that insurance premiums are following the trend.

The average annual rate increase for auto insurance across the U.S. is 8.4%. So where does New England rank among the U.S. states? Massachusetts is 20% higher than the national average (5th highest). Rhode Island is 53% higher than the national average and Connecticut is 15% higher than the national average. New Hampshire is -13% less than the national average and Maine and Vermont are -37% and -38% respectively lower than the national average. We promise moving to Maine & Vermont is not the solution it may appear.

Why Are Auto Insurance Rates Increasing in 2023?

There are several factors that contribute to the increase in auto insurance rates:

  1. Increased frequency and severity of accidents: Even during the pandemic the number of accidents on the roads has been increasing, and the severity of these accidents has also been on the rise. This is due to a variety of factors, including distracted driving, impaired driving, and more cars on the road.
  2. Rising medical costs: The cost of medical care has been increasing, and this is reflected in the cost of auto insurance. In the event of an accident, the medical bills can be very high, which drives up the cost of car insurance.
  3. Higher repair costs: Cars today are more technologically advanced, which means that they are more expensive to repair when they are damaged. This is another factor that contributes to the rising cost of auto insurance.
  4. Fraudulent claims: Fraudulent claims have also been on the rise, and insurance companies have to raise their rates to cover the cost of these claims.
  5. Catastrophic events: Catastrophic events, such as hurricanes and floods, can also lead to an increase in insurance rates. These events can cause significant damage to vehicles and lead to a higher number of claims.

Overall, the increase in auto insurance rates is a multifaceted issue influenced by a variety of componants.

How To Handle Rising Auto Insurance Rates

Many factors go into the premium cost of an auto policy. Where you live, how long you have been licensed, how far you drive on average, etc. One factor that policy owners have the most control over is their driving habits. If safety for safety’s sake isn’t enough for you, consider the impact poor driving habits can have on your premium cost: a driver in Massachusetts could see an average rate increase of 52% if they have an accident, OUI, or a speeding ticket in 2023.

We never want to see our clients sacrifice coverage for cost but we advise reviewing the following courses of action with our agents to ensure you are getting the best price and discounts available to you:

  • Become an E-customer and sign up for EFT (paperless billing)
  • Verify your annual mileage
  • Sign up for Telematics (ONLY if you have good driving habits)
  • Increase your collision deductible to $1000
  • Make sure you’ve bundled your home & auto insurance coverage for the account credit!

While we cannot change the trend of rising car insurance rates, as an Agency we can and continue to deliver our clients the customized coverage they need, at the best price, with service they can count on. Reach out today!

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