To help keep you informed on the various factors that affect your insurance rate, we offer the following information to consider:
- Distracted driving leads to more claims - Texting and other forms of distracted driving increase the chances of a crash - and distracted driving is on the rise. This leads to an increase in claims made to insurers, making the cost to insure everyone higher. One out of four car accidents are caused by texting while driving.
- People are driving more - Low unemployment and low gas prices mean people are driving more, both for business and personal reasons. This equates to more accidents on the road.
- Repair costs are increasing - New technology in today’s vehicles is more complex, and more expensive to repair. For example, in 1990, a Honda Accord LX bumper had 10 parts. The 2015 model bumper has 22 different parts, including new sensors.
- The economy - Increases in legal and medical expenses affect how much insurers need to pay to ensure claims are handled properly. The average cost per payout for bodily injury rose 32% in 8-years, to more than $15,500. During that period, the general inflation rate rose 19%.
- Auto fatalities rose an estimated 8% last year, according to the National Safety Council. That was the largest annual increase in 50 years.
- Low interest rates that have made it hard for consumers to earn much on their bank savings accounts is also making it hard for insurers to earn much on their invested premiums.
