Car Insurance Rates Aren’t Immune to Inflation
As predicted, you'll probably see an increase in your car insurance premium in 2022.
Written by Andrew Kidd
Reviewed by Kathleen Flear
In the latest
hit to the peoples' wallets
, several major auto insurers have increased their car insurance
rates in 2022—and more are likely to follow suit.Major auto insurers like Allstate, Progressive, Geico, and
State Farm
have increased their rates in several states.Per
Small Business Trends
, car insurance premiums have been increasing by 5% to 15% across the U.S., which amounts to an increase of about $17 per month on average.What is causing this car insurance increase?
As mentioned before, it's due to inflation. But how does inflation figure into auto insurance costs?
It's because the cost of repairing insured vehicles after an accident is rising, according to industry experts. That includes the cost of components like bumpers, fenders and other common part casualties of most vehicle collisions and accidents.
That also includes the cost of new vehicles, which are often needed in the case of total losses—and have themselves been seeing soaring prices lately.
In a perfect world, auto insurance companies would absorb those added costs and write them off as the increased cost of doing business in 2022.
And with auto insurers reporting nearly $30 billion in profit in 2020 during the height of the COVID-19 pandemic—when vehicle accidents and claims were at historic lows—you'd think they'd have set some aside as a rainy day fund.
Spoiler: they didn't. It's raining, and insurance rates are rising.
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How didn't we see this coming?
We did, though. Industry experts predicted earlier this year that automotive insurance rates were set to increase as many motorists hit the road again after more than a year of no commute.
With that return to the road came the resurgence of some risky behavior and the number of accidents.
For instance,
Forbes
reported an increase in speeding since the pandemic began, and related to this, the National Highway Traffic Safety Administration noted an increase of more than 18% of fatal accidents between January and June 2021, compared with the same period in 2020. During that period, insurers also saw an increase in the cost of auto parts.When it rains, it pours
As if fate was hellbent on making lives more miserable, the first half of 2022 also saw record
gas prices
, which served as an added sting to the average American's bank account. With the cost of gas peaking at over $5 a gallon and currently hovering around $4.72 nationally—combined with many Americans returning to their physical workplaces following a long work-from-home period—sets the stage for some major disappointment (and in some cases, serious financial hardship) when the paycheck clears.
Beat inflation and save on car insurance
If you want to fight back against these rising insurance rates, the best way to do that is to go to the insurer offering the best rate. That means shopping around—but how do you do that when you're busy keeping up the rest of life's obligations?
You're in luck, because Jerry is the app for you. Car insurance comparison shopping and broker app
Jerry
can find you affordable car insurance at the best rate. Jerry customers save an average of $887 a year to insure their vehicle—and it can also save you some time by doing the grueling quote-finding work for you. The Jerry app sources quotes from insurance companies like Nationwide, Safeco, and Travelers to find you the best deal.
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