Car insurance rates are surging across the nation, with some people paying 20% more this year, according to a Wall Street Journal report.
The rate increases are the result of two key factors, the newspaper reports.
As you might expect, inflation is one driver of the higher costs. Insurers are turning to state officials and trying to get approval to charge higher rates “for what they believe will be more sustained inflation,” according to the WSJ.
The cost of car repairs and replacing vehicles has risen considerably over the past couple of years. In addition, a shortage of car parts and body-shop technicians means insurance companies sometimes need to provide rental cars for longer to policyholders whose vehicles are damaged.
Another factor driving higher premiums is an increase in serious car crashes. Last year, traffic fatalities were higher than at any point in the past 16 years.
Many consumers already are seeing premium hikes as they renew their policies. But the increases vary from place to place.
The WSJ notes that states such as California have been reluctant to approve the price increases. However, in many other places, rate hikes are underway.
Elyse Greenspan, an analyst with Wells Fargo Securities, told the WSJ that from the middle of 2021 to now, car insurers have gotten increases on around 61% of personal-auto premiums.
If the thought of yet another higher cost makes you cringe, see if a company such as The Zebra can get you a lower rate.
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For more on The Zebra and other ways to save, check out “7 Clever Ways to Fix Your Finances in 10 Minutes (or Less).”