Auto insurance premiums are on a constant rise. There are many reasons behind the increase in the cost of premiums. While some may be preventable, others result from the steady rise in the cost of living and an increase in the cost of the vehicles themselves. It’s important to understand what causes the premiums to rise so that you can take the necessary actions to keep them low.
Here are 4 common reasons behind the rising auto insurance premium rates:
1. Increased Cost of Medical Care
The rising cost of medical care has a direct impact on auto insurance rates. When a person goes to the hospital after an auto accident, their auto insurance covers the medical expenses. For insurance companies, the most convenient way to absorb these costs is by including the additional costs in the premiums that are charged for the insurance.
2. Higher Repair Costs
Newer vehicles, in general, cost more to repair. State of the art technology is used to diagnose or troubleshoot engine problems. Service technicians must attend special classes to ensure they can make the necessary repairs on engine components that rely on computers to function properly. Many of the parts being used today are so advanced that special tools are needed to make the necessary repairs. This makes it almost impossible for you to fix your own vehicle. Most insurance companies prefer to pay an authorized body shop or car dealership to make repairs on a vehicle after an accident. This ensures that the repairs are completed correctly and that the warranty for the new parts remain intact.
3. More Miles on the Road
Vehicles today are being driven much more than ever before. More miles are being put on vehicles as families and individuals are actively traveling longer distances to work and school. People are also rediscovering their world by traveling to nearby destinations. With modern GPS technology, individuals can travel almost anywhere with easy-to-access maps at their disposal. People of all ages are driving longer distances more frequently and enjoying every minute of it.
4. Increase in Claims Filed
Another reason for an increase in the auto insurance premiums is a rise in the number of claims being filed that include both personal injury and property damage payouts. While some people do not report every minor scratch or scrape, others will file claims on even minor accidents. Another reason for the rise in claims is purchasing high-end vehicles that are challenging to operate. For example, high-powered sports cars are beautiful to look at, but extremely hard to keep under control, especially if you aren’t used to handling a high-performance vehicle at higher speeds.
These are some factors that may escalate the premiums of your auto insurance policy. Are you looking for assistance with your auto insurance needs? Contact the experts at the Scavone Insurance Center in White Plains, New York, today. Our team is looking forward to answering all your questions.