Lending Tree reports that Auto insurance may see a rate increase this year. But why? Read more.
There are several reasons why auto insurance prices will likely rise this year. The increasing record of natural disasters as well as the increasing repair rate of tech-loaded vehicles are just some of the assumed reasons for the rise of car insurance rates.
The continuous climb of auto insurance rates
The consistent increase of losses due to car insurance claims is probably one of the major factors for more expensive auto insurance rates this year. The increase started in 2017 with 7.2% of reported losses and by the following year, the report was added with a 1.6% rate hike.
The report further showed that the combined loss ratio of over 100% indicating that the companies had more losses than earned revenue from their premium coverages. This negative profit will be a driving factor for the increased rate of auto insurance.
Companies are losing money
The US has been struck with a number of natural disasters in 2019. Year after year, natural disasters result in billion of dollars of insurance claims. It’s not only the home insurers that are taking the hit, but the auto insurance industry is also taking on the same damage as well.
In California alone, the Department of Insurance estimated that wildfires from 2018 cased over $123 million in nonresidential and auto claims. The storms Michael and Florence also resulted in an insurance loss of between $7.7 billion to $14.6 billion.
Another reason for insurance companies losing money is because if vehicle repairs that are getting more and more expensive by the day. New vehicles have higher repair cost especially with the cars’ new features and technology. This higher repair cost will also convince companies to increase their premiums to make up with the expected loss.
Cost of auto insurance in the future
There’s no way to tell just how much increase there will be. It’s important to budget and be prepared for any potential price increases.
Lower your car insurance rates
You can do something to lower your car insurance rates by considering a usage-based insurance program. It’s done by installing a telematics device in your car and it will send data of the car’s use such as the brake, acceleration, speed, and distance traveled in a day.
Drivers with good driving habits often have benefits as opposed to other drivers. Drivers with good records will be approved for discounts much faster than others. If you can, it’s also better fo drive fewer miles to qualify for the low-mileage discount.
The telematics device attached to your device will also be helpful in terms of investigations. The stored data will help speed up the investigation process.
London Insurance Agency offers Auto Car Insurance
Our agents at London Insurance Agency are expert insurance agents that will attend to your needs. Our independent insurance agents represent several companies and they will make sure to help you with your needs and choices of coverage options.
It is our goal to provide you with the lowest possible price. Contact us now!