If you’ve noticed a hike in your premiums for auto insurance, you’re not alone. Industry rates for both commercial and personal policies have been on the upswing since April of 2016, when a hefty 6 percent jump accounted for the largest increase in more than a decade. The trends that are driving higher rates show no signs of changing, so the market is not likely to soften in the near future.
What are those trends? Start with a combination of relatively low gas prices and relatively high employment. That means more drivers on the road, but that’s only the start of the story. The more significant issue is how those drivers are behaving. A study by the AAA Foundation for Traffic Safety found that a staggering 87 percent of drivers admit to at least one risky behavior while behind the wheel, including mobile phone use and failure to wear a seatbelt. That’s a sure recipe for more costly accidents.
And the cost of mitigating those accidents continues to rise. The technology in most modern cars makes both parts and repair costs higher. Collision repair centers must continually add new equipment and training to keep up with technology changes, further ratcheting up repair expenses.
On top of all that, for every 10 cars you pass on the road, one is likely to be driven by an uninsured driver (13 percent, to be exact). That alone tacks another $14 onto the premium for every insured driver.
And finally, many are less than truthful with our insurers, fudging information on an application in an effort to obtain lower rates. Combine that with fraud on the claims end of the process – fake injuries blamed on auto accidents – and you get a price tag of $48 billion annually … money that’s recovered in the form of higher premiums.
Just about everything discussed here is beyond the control of an individual driver or company, so what can you do to keep your premiums down?
Start with a full review of your risk management policies and procedures with your insurance advisor. Make sure you’re getting all applicable discounts, and take advantage of multi-line discounts by placing all your coverages with the same insurer if you haven’t already.
Many individuals don’t realize that their credit history is a factor in how much they pay for insurance. Do whatever you can to get your credit score moving in the upward direction; that will help over the long term.
And both families and businesses can address perhaps the most dangerous driving behavior – and often secure a premium discount – by using technology that limits the use of mobile devices in a vehicle. Click here to learn more about Cellcontrol from Consolidated.
Questions about auto coverage for your home or business? Contact Consolidated Insurance.