Some might say, well, what’s new? But this time is a little different. The fact is, Car Insurance Companies are always tweaking their insurance rates. Always. Some might say they overthink it. It’s me, I say they overthink it. But this time around is related to similar issues the rest of the country is facing with regard to material and labor costs.
When car accidents occur, auto insurance companies pay for parts, labor and other costs associated with repairing or replacing damaged vehicles. Since the start of our current pandemic supply chain disruptions and labor shortages have driven costs up substantially. Insurance companies see this same inflation and are no different than any other industry when dealing with the challenges of the current times.
According to the Bureau of Labor Statistics, the average cost for vehicle repairs has increased by 4% over the last year. Used car and truck prices have skyrocketed by more than 40% over this same period. 40% is a significant number for an insurance company to replace a vehicle. The premium collected for this insurance policy term was not based on the additional 40% pay out for total loss vehicles.
Since driving behavior has returned to pre-pandemic levels, costs have continued to escalate. Insurance Companies constantly evaluate rates, profitability, customer driving behavior, claims frequency, customer growth. When an insurance company pays out more money than they receive in insurance premiums, they will tend to raise insurance rates.
Car Insurance companies are not unlike any other business. If they cannot make money with their current pricing, they have to raise rates. As a result, you will see higher pricing from all insurance companies. We work with some of the best insurance companies in the entire industry. Some of these companies are Progressive Insurance, Travelers Insurance, Auto Owners Insurance, Nationwide Insurance, Safeco Insurance, to name a few.
If you would like a car insurance quote, we would be happy to do that for you. There is a very good chance we can save you some money on your car insurance. To get started, you can call/text to 763-767-0522, fill out the quick contact form below or scan this QR code to safely import your current insurance (you won’t even have to fill anything out if you do this)