June 5, 2023
Kiplinger recently published an article featuring Aaron Stevens, Senior Lecturer of Finance, discussing the rising auto insurance rates causing drivers to switch car insurance carriers.
According to a recent survey from http://CarInsurance.com , 57% of drivers said their car insurance rates rose in the last year. Approximately 32% of these drivers claim their rates have increased by at least 10%, leading them to shop around for a different insurer. In all, about 25% of respondents left Allstate, 22% left Geico, and 21% left Progressive. Inflation was cited as the reason for the rise in auto insurance rates by 43% of drivers. From January 2022 to January 2023, auto insurance rates increased 14.7%, according to the Consumer Price Index.
Stevens stated that “the cost of a car insurance policy depends on the expected value of losses. As the prices for new and used cars, as well as replacement parts and labor, have increased, it makes sense that the expected value of losses paid by insurance claims would increase in tandem. Thus, as the costs associated with insurance claims rise, so should the policy premiums.”
With rates rising, more people will likely shop around to save money on car insurance.