Despite providing refunds to customers in billions, car insurance profits have increased during the pandemic, with only a few drivers on road, causing the number of accident-related claims to drop dramatically. Even with increased profits, auto insurance companies are likely to increase premiums due to pandemic-induced supply-chain and labor shortages, high demand for new and used cars, careless driving, etc.
A semiconductor shortage and increased demand from drivers have increased the cost of new and used cars.
The cost of repairing cars has also increased due to the shortage of auto supplies and increased use of advanced driver assistance systems (ADAS). ADAS includes expensive and difficult-to-fix sensors and cameras to assist drivers while parking and driving. Therefore, even a minor accident can lead to costly repair bills, increasing claim amounts. Besides, the shortage of auto mechanics will also contribute to increased repair costs.
Car accidents caused by distracted driving have been increasing for years. According to the National Highway Traffic Safety Administration, distracted driving-related accidents have contributed to 9% of deaths in 2019. The National Association of Insurance Commissioners has labeled distracted driving an epidemic in America.
Driving faster has become usual after the pandemic, further increasing the possibility of car accidents. According to the US Department of Transportation, 38,680 people died in car crashes in 2020, which is the highest number of accident-related deaths since 2007.
As pandemic-related restrictions have been removed in most states, more drivers are back on the road. This means the number of auto accident claims is likely to increase, triggering increased premium rates in 2022.
Despite the reason for an increase in premiums, you can save on your car insurance with the following tips:
Some insurance companies offer discounts for taking a defensive driver course, having a clean driving record, paying premiums on time, etc. You can check with your provider whether they offer any such discounts.
Review your auto insurance policy every year and exclude any unwanted coverages. For example, collision and comprehensive coverages are not needed for an older car, as they pay only the current market value minus deductible if the car is totaled.
Your auto insurance premiums will decrease if you pay a higher deductible (out-of-pocket costs) for claims.
At Abatelli Insurance Group, we customize auto insurance policies according to your specific coverage requirements and budget. Get a quote online or contact us today to get a personalized car insurance policy.