Those car insurance discounts you might have enjoyed during the peak of the COVID-19 pandemic are starting to fade away.
Following two years of sitting pretty during a global pandemic, car insurance companies like Allstate
are reckoning with the growing number of drivers hitting the roads again—and the accidents they cause—by making their customers pay more. Allstate profits down, premiums up
The Wall Street Journal
reports that Allstate recorded a 61% decline in net income compared with 2021 as the insurance industry faces an increasing number of accidents and higher claims costs in the U.S. A top-five U.S. car insurer, Allstate’s 2022 first-quarter earnings were at $726 million, compared with $1.87 billion the same time in 2021. Of course, Allstate is passing this increased cost of doing business on to the customer; the company announced earlier in May that it will raise its premiums
in response to higher driver volume and the subsequent increase in accidents. Why are car insurance companies raising their prices?
Allstate, like other insurance companies, was very profitable during the pandemic years when commuting was nearly non-existent and fewer drivers were on the road. Minor accidents like fender-benders were much less common than they were prior to the pandemic.
With more people on the road, accidents are beginning to pick back up.Allstate
is also pointing to inflation as a leading culprit for its price hike; the cost of repairs, replacement vehicles and rentals have all jumped, according to the company. If you’ve tried to purchase a new or used vehicle in the past few months, you’d be well aware of the shortage of inventory on most dealer lots—and the higher markups and reduced incentives for what’s actually in stock.
Again, it’s not just Allstate. The number of claims has also jumped across the insurance industry due in part to accident damage being generally more severe from higher driving speeds. Distracted driving and driving under the influence of drugs and alcohol has also become more common.
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What does this mean for the average vehicle owner?
It means your premium is most likely going to go up depending on your insurance provider. Many insurers are passing these new costs onto their customers, increasing premiums by about 6% to 8% on average, according to WSJ. That means it might be smart to start shopping around for new insurance.
Luckily, you’re in the right place. Jerry
customers save an average of over $800 a year to insure their vehicle. If you’re deterred by the work of gathering quotes and you’d rather leave it to someone else, the Jerry app sources quotes from 55+ insurance companies, like Nationwide, Safeco, Progressive and Travelers. Jerry even helps cancel your old policy once you’ve made your pick. Once you download Jerry, just answer a handful of questions that will take you roughly 45 seconds to complete and you’ll immediately get car insurance quotes for coverage similar to your current plan.
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