Talking About Insurance Coverage

Auto Insurance Rate Increases: Why They're Happening And What You Can Do

4 July 2016 by Jar Ross

Auto insurance rates are increasing more quickly than they have in 13 years, with a 6 percent jump in April alone. Why are auto insurance rates on the rise, and what can you do about it?

Why Auto Insurance Rates are Suddenly Increasing

There are three reasons why motorists are starting to pay more for car insurance: 

1. Your wallet may be happy that you're paying less at the pump. In fact, gas prices are at a 12-year low. But lower gas prices mean that people are driving more miles -- and that means more chances of vehicle accidents. 
2. A trend in higher speed limits means that when accidents do happen, they're more likely to cause fatalities or serious injuries. That's more costly for insurance companies. The trend began in 2008, when the federal government eliminated a national maximum speed limit; since then, six states have permitted 80 mile-per-hour speed limits on some highways. 
3. Insurance companies have seen falling profits. A number of economic factors paired with the issues that have caused more fatalities on the roads mean insurance corporations are having trouble making money.

What You Can Do To Lower Your Rates

Your driving history is a big part of how much you pay; though recent infractions may not show up on your record until your insurer renews your policy, your rates will almost always be affected by a ticket or accident for as long as 3 years. The best -- and most obvious -- thing you can do to keep your rates low is to drive safely, avoiding traffic tickets and accidents.

You can also take advantage of new pilot projects where insurance companies monitor your driving habits. A small device attached to your car reports on the times and distances you drive as well as how well you do. Insurance companies can track:

• Miles driven.
• Times of day you drive.
• How hard you brake.
• How much and often you accelerate.
• What turns you make.
• Your speed.

If you are confident in your driving habits, you can save between 10 and 15 percent on average. If you have younger drivers, tracking their driving behavior may save you even more. The device will communicate wirelessly with your insurance company's database, so you won't have to do anything once it is installed.

Talk to your insurance agent, like Manassero Insurance Agency Inc, about ways you can lower your insurance rates. If you haven't checked in with your agent recently, give them a call -- you may qualify for new discounts.

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