There are many current auto trends that will directly result in increased insurance rates touching nearly every driver in 2023. Rate hikes are carrier-by-carrier, and insurance companies are using highly sophisticated algorithms to calculate premiums. Read on to understand what trends are causing your insurance cost to increase and how your AAA Insurance Advisor can help reduce your overall cost of insurance.

Higher car prices

Prices for new and used cars are abnormally high. Data from Kelley Blue Book shows the transaction cost for both new and used have increased by more than11% over the last year. The correlation to your insurance premium is relatively simple. As vehicle prices rise, so does the cost to insure them.

Rise in car crashes and fatalities

Accidents are growing in frequency and severity, resulting in more litigation and higher liability settlements.

Theft claims

Theft claims are on the rise. Comprehensive coverage includes coverage for stolen vehicles, break-ins, and vandalism, and each of these increased in 2022. Catalytic converters have become a popular theft item, resulting in expensive claims for insurance companies.

The broken supply chain

When looking at inflation and the cost of everything we buy, in many cases it can be traced back to a shortage of supply. When it comes to sourcing replacement parts for damaged cars, it can be especially problematic. Auto parts manufacturers who traditionally rely on “just in time” inventory management are dealing with labor shortages, higher shipping prices, and increased raw material costs while playing catch up to increasingly high demand. In short, replacement parts take longer to get and cost more.

Sophisticated technology

Today’s modern cars are moving computers with multiple sensors and electronic component systems that do not respond well to even moderate collisions. Replacing these high-tech gadgets adds another level of cost for insurance companies. The more add-ons manufacturers include, the more costly these cars become to repair.

Steps you can take to reduce your premium:

• Have a AAA Advisor shop your insurance - All insurance companies are not the same, and some insurance companies are simply just more expensive than others. In this market, there is probably a better deal to be had, so let one of our professionals work for you.
• Bundle your coverage - If you have different companies for your auto and home insurance, you are likely missing out on big discounts.
• Take a look at your coverage - You may be paying for options you no longer need.
• Increase deductibles - Even small claims can increase your premiums. Ask your AAA Insurance Advisor how using higher deductibles can lower your rates and reduce your overall cost of insurance.
• Ask for discounts - Did you know some insurance companies give a discount for AAA Members? Let us show you how it works.

Looking to save on your insurance? Learn more or get in touch with a AAA Insurance Advisor today!

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