Understanding the Impact of Auto Insurance Inflation

Auto insurance is a significant part of most household budgets, representing about 2.5% of annual expenditures. With the recent rise in auto insurance premiums, many households are feeling the financial strain. According to data from the Bureau of Labor Statistics (BLS), auto insurance premiums have increased by 17% over the past year, far outpacing the overall inflation rate of 3% as of June 2023.

Why Are Auto Insurance Premiums Rising?

Several factors contribute to the rising cost of auto insurance. One major factor is the increased cost of claims. As more people return to the roads, the frequency of accidents and claims has risen. Additionally, the cost of repairing vehicles has increased, particularly for electric vehicles, which are more expensive to insure.

Despite these rising costs, many drivers are not taking steps to find more affordable insurance options. An Experian survey conducted in July 2023 found that 78% of drivers stuck with their existing insurance carrier in the past 12 months, and 59% haven’t explored the deals they may get from competing insurers.

The Importance of Shopping Around for Auto Insurance

While it may seem convenient to stick with your current insurer, shopping around for auto insurance can lead to significant savings. The same Experian survey revealed that more consumers reported an increase in their vehicle premium in the past six months than those whose premiums remained unchanged or decreased. This suggests that many drivers could benefit from exploring other insurance options.

Higher-income households, in particular, have seen a more significant increase in their auto insurance premiums. This is partly due to the increased popularity of electric vehicles among those in higher tax brackets. Electric cars cost roughly 25% more to insure on average than traditional fuel combustion vehicles.

How Moving Affects Your Auto Insurance Premiums

Location is a primary factor in premium calculations, and moving can result in a change in rates. However, the Experian survey indicated that moving made little or no difference in whether drivers looked for new or cheaper insurance. This suggests that many drivers are not taking full advantage of potential savings opportunities when they relocate.

Claims and Customer Satisfaction

Nearly 20% of the drivers surveyed by Experian indicated they made at least one claim in the past 12 months. For most claimants, the experience was positive, with close to three-quarters reporting satisfaction with both the claims process and the settlement they received. However, 8% were not satisfied with either the claims process or the settlement.

Most claims were settled in a timely fashion, with the majority being resolved within three weeks or less. This indicates that while there are areas for improvement, many insurers are handling claims efficiently.

Take Action to Save on Your Auto Insurance

Although comparison shopping won’t always result in premium savings, it’s the only way to find out if you can get a better deal. With auto insurance premiums continuing to rise, it’s more important than ever to scrutinize your premium prices and explore other options.

At O1ne Mortgage, we understand the importance of managing your finances effectively. While we specialize in mortgage services, we also encourage our clients to take a proactive approach to all their financial needs, including auto insurance. By exploring different insurance options, you can potentially save money that can be better spent on other essential expenses.

Contact O1ne Mortgage for Your Mortgage Needs

If you’re looking for ways to save on your mortgage, O1ne Mortgage is here to help. Our team of experienced loan officers is dedicated to finding the best mortgage solutions for you. Whether you’re buying a new home, refinancing your existing mortgage, or looking for ways to lower your monthly payments, we have the expertise to assist you.

Call us today at 213-732-3074 to discuss your mortgage needs and discover how we can help you achieve your financial goals. At O1ne Mortgage, we’re committed to providing exceptional service and helping you make the most of your money.