Auto insurance is a mandatory expense each month. While most of us spend our days trying to lower our premiums by being as safe as possible, our rates continue to go up no matter what we do. Several factors affect the cost of your premiums.
Knowing what impacts your premiums may help you make better choices while on the road.
An Increase in Miles
Even though many people enjoy the convenience of working at home, people are putting more and more miles on their vehicles. An increase in the number of miles on a vehicle will cause its value to depreciate faster than usual. Increasing the number of miles you drive each year, also increases your potential risk of an accident. The higher the risk, the higher your premiums will be.
Another reason for the rise in auto insurance premiums is that more claims are being filed for accidents that result in property damage and personal injury. An increase in the number of claims means an increase in the amount of money being paid regularly. With the rising cost of both car repairs and medical expenses, an increase in the number of claims has a direct impact on the rising cost of auto insurance premiums.
Security and Safety Issues
Newer vehicles are not always as safe and secure as they are made out to be. The more expensive the car, the more likely it is to be stolen. High-end vehicles like Cadillac Escalades are popular targets with auto thieves. Sports cars like the Ford Mustang and the Chevrolet Camaro are often purchased because of their ability to achieve high speeds. Risk-takers who like to drive as fast as their cars will go are also identified as one of the major reasons for the rise in auto insurance premiums.
Newer cars are designed for maximum performance. They contain state of the art electronics and high-performance parts that are extremely expensive to repair or replace if they are damaged in an accident. Adding to the high cost of the parts, the cost of labor has also increased. Service technicians and mechanics are required to use technologically advanced tools and diagnostic programs, which also lead to an increase in the overall cost of repairs and services.
An Increase in Medical Costs
Another reason for the ever-rising cost of auto insurance is the continued increase in medical expenses. As healthcare costs go higher, paying for injuries received in auto accidents can lead to higher premiums as well. Injuries that are the result of auto accidents can lead to chronic or long-term pain and discomfort. This leads to extended treatment plans that can drive the cost of your insurance up.
Other than these factors, auto insurance rates can increase for people with higher traffic violations and a higher number of at-fault accidents.
Pierce Insurance Group provides its clients with the information they need to make informed decisions about their car insurance. Our agents always go the extra mile to ensure that clients have what they need to keep their premiums as low as possible at all times.