The Total Coverage Blog
Whether you own a single car or a fleet for your business, you know how expensive a vehicle can be. From maintenance and repairs to the price of car insurance, it all adds up. Unfortunately, prices for anything car-related seem to be on the rise.
Curious about what is driving these price hikes? The more you know about what’s happening behind the scenes, the more you can understand the price of your car insurance.
Plus, we’re experts when it comes to insuring your car. We’ll share a few tips on how to save you some money along the way.
Ready to go?
While it does seem that the price of car insurance is on the rise, part of what we’re actually seeing is a return to pre-pandemic levels. Drivers are returning to the road, meaning more auto accidents and more claims. But this is just part of the story…
Supply and demand is a basic concept that can get complicated. We’re here to un-complicate things and keep it simple.
New vehicle supply is low. This is caused by a shortage of microchips and raw materials (think glass, steel).
Used vehicle demand is high. A short supply of new vehicles means more people are looking at used cars, causing their values to rise. How does this impact the price of auto insurance? Simply put, when a car is totaled, insurance companies pay claims based on used car or truck values.
Like we mentioned above, there is a global shortage of microchips and raw materials. This shortage does two things: Makes car parts more expensive and harder to get.
Vehicles that need to be repaired after an accident require the same parts used to make new cars. According to CCC Intelligent Solutions, in the first 10 months of 2021, the average part increased in price by six percent. Who is footing the repair bill? Insurance companies.
Adding to the issue is the time it takes to get parts. Not only are insurers footing the increased repair bills, but they are paying for almost three extra days of rental cars because of the delay.
So, what can you do to save?
Insurance companies are in a tight spot. They’re navigating the effects of pandemic-driven issues while trying to remain competitive for their customers.
That being said, we’re experts when it comes to car insurance – both personal and commercial. Here are a few tips to help combat rising prices:
Hopefully this gives you a better idea of what is going on behind the scenes and driving the price of car insurance. Most importantly, we are always here to help you find the right insurance at the right price. If you’re in the market for new auto insurance or want to make changes to your current policy, contact us by clicking below.