Insurance Went Up For No Reason - From gas prices to grocery costs, it's almost impossible not to feel the pinch in your wallet these days. Unfortunately, the same trend applies to car insurance and other car expenses. Here are five reasons why your auto insurance bill could be going up.
It is very important to have car insurance and keep records of your vehicle. It can be tempting to skip insurance because of the cost. But according to Money Under 30, it's an expense you shouldn't skimp on when you're driving.
Insurance Went Up For No Reason
The most important reason to get car insurance is that it is illegal to drive without insurance in all but two states. There are still penalties if law enforcement finds you uninsured. In fact, in some states, you can even face a permanent suspension of your driver's license or even jail time. It's not worth the risk.
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In case of a car accident, you need to get car insurance. It doesn't matter who caused the collision. You always want your insurance to handle the cost. The insurance can also protect other assets in the event of an accident. Insurance can prevent the other driver from coming after your car, home and bank account for damages. Finally, auto insurance protects you from liability for the medical expenses of passengers if you are at fault in an accident.
Buying insurance for your car is more than the legal thing. That's the smart thing. It may be a pain to pay that bill, but the peace of mind for you and other drivers is well worth the investment.
All of this means that your car insurance premiums may increase. Consider these reasons why you might pay more and plan accordingly.
According to Erie Insurance, the consumer price index (CPI) is up more than 7% for 2020. This is the highest value in more than 40 years. So you're paying about 7% more on all your bills, including car insurance, than you were a few years ago.
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Inflation is hitting the automotive industry hard. Although the average increase is 7%, the inflation of vehicle parts is close to 10%. An increase in the number of vehicle parts means that the insurance will pay more to repair the car. Your insurer will likely pass the price increase on to you by raising your premiums.
In addition, auto repair costs even more due to supply chain issues and labor shortages. Car repair now costs 20% more than in 2020. Due to supply chain and labor availability issues, repairs may also take longer. This means that you may be in rental vehicles for longer periods of time, which puts a strain on your insurance company for claim costs.
Used car prices have increased by 27% since 2021. And the price of new cars increased by more than 14%. More expensive cars mean higher car insurance premiums.
People did not drive as much in 2020 and 2021 because they stayed at home more. This meant less wear and tear on their vehicles and less accidents. Nowadays, there are more and more motorists on the roads, which leads to more car accidents. Unfortunately, these accidents have also become more serious and cause more deaths. Therefore, the increased risk causes higher car insurance premiums. "Expert-vetted" means that our Financial Review Board has carefully reviewed the article for accuracy and clarity. The Review Board consists of a panel of financial experts whose goal is to ensure that our content is always objective and balanced.
Reasons Your Auto Insurance Could Increase
By Carol Pope By Carol PopeArrow Right Insurance Writer Carol Pope is an insurance writer and spent 12 years as an auto insurance agent before joining the team. During that time, he sold, serviced and insured auto insurance for people across the country. He also has experience in selling additional insurance, such as umbrella insurance. Contact Carol Pope by email at Carol Pope
Edited by Angelica Leicht Edited by Angelica LeichtArrow Right Insurance Editor Angelica Leicht is the team's insurance editor. He is truly passionate about helping readers make informed decisions about their portfolio, whether it's the right comprehensive car insurance policy or the best life insurance policy. Angelica Leicht
Written by Mark Friedlander Reviewed by Mark Friedlander. Connect with Mark Friedlander on Twitter Twitter Connect with Mark Friedlander on LinkedIn About our Linkedin Rating Board Mark Friedlander
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Between filing a claim, getting your vehicle back, and dealing with any injuries, there can be a lot on your mind after an at-fault accident. You may also be wondering how an accident affects your car insurance premiums and how accident forgiveness (if any) comes into play.
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