If you have not received a notice yet stating your auto insurance rate is increasing, you can almost certainly expect one is coming.
According to a recent report by Insurify, the national average cost of car insurance rose 9% in 2022. It’s projected to rise 7% in 2023.
While inflation is one impact on prices, it’s not the only factor.
“Car insurance companies are raising rates across the U.S. because drivers are getting into more traffic accidents and those accidents are getting more expensive to remediate,” explained Chase Gardner, a data analyst with Insurify.
The higher cost of repair parts, labor shortages and supply chain disruptions are all causing claims to become more expensive for insurance companies to pay out.
“Even if you got into the same accident as you did two years ago, it costs 15% more to repair now,” Gardner added.
To offset the higher costs of claims, companies are raising insurance rates.
In Arizona, only liability insurance is required. It pays for damage and injuries for the other driver if you cause a crash.
The minimum coverage is 25/50/15. That means $25,000 for bodily injury per person, $50,000 per crash, and $15,000 for property damage.
If you’re driving a lot, you may need to increase those levels since your exposure is greater.
The real costs come while trying to protect your own car.
Collision insurance covers damage from crashes and comprehensive insurance covers mostly non-driving issues, like damage from theft or weather.
The Let Joe Know team compared coverage options with two popular insurers — State Farm and Progressive — using as close to the same coverage as we could find.
We compared full coverage for a 2020 Ford F-150.
State Farm’s online quote was $1,640 for six months. Progressive’s online quote was $1,080.
When comparing minimal liability coverage, State Farm’s quote was again higher — $639 compared to Progressive at $389 for six months.
We also compared coverage for a 2020 Honda Civic.
When comparing full coverage, the State Farm online quote was $1,483 compared to the Progressive quote of $883 for six months.
For minimal coverage, the State Farm quote was $563 to Progressive’s $311 for six months.
Prices may have changed since we completed the comparison process, but the difference at times was as much as $600.
Many factors go into determining insurance rates, but the number one rule to save on auto insurance is to shop around.
You could also consider raising your deductible.
It’s what you pay before comprehensive or collision insurance kicks in. Higher deductibles mean lower policy costs.
Make sure you take advantage of various discounts companies provide.
Safety features you already have in your car may apply. Ask if you can take a defensive driving class to save or add a ‘good student’ discount if there is a student on your policy.
You can compare auto insurance rates online with Insurify.
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