If you’re like most people, you’re probably asking yourself:
Learn about factors affecting the market, ways to help lower your auto insurance rate and how optional coverage packages could help reduce out-of-pocket expenses in the event of a claim.
There are many reasons for the current auto insurance rate increases across the market. Here are some of the notable ones:
Starting in early 2020, people began staying home because of the pandemic. They were generally driving less, which resulted in fewer accidents. During 2021, people started returning to pre-pandemic behaviors such as driving more often. More cars on the road generally means the likelihood of more accidents. There has also been an increase in the severity of automobile accidents.1
Another contributor affecting the auto insurance market: The value of most vehicles — both new and used — is going up. In fact, used car prices are up 26.4%; new car prices are up 9.8%.2
What’s causing this? Like many of the other price increases happening in the United States and around the world today, there has been a rise in the demand for cars, SUVs and trucks — and their parts — at a time when supply is going down.
People still want new vehicles for the reasons they always have:
On top of this, many of the people who moved out of cities and into the suburbs and rural areas during the pandemic now need cars for transportation. This has created a novel form of demand in addition to the typical reasons individuals buy new cars.
Vehicle supply is down in large part because key materials like semiconductors, which are needed for the computers found in cars today, experienced a manufacturing interruption during the pandemic. Although manufacturing has resumed, the current supply still runs short of existing and pent-up demand. Also, like many other products imported into the United States, countless new cars, and components to build them are sitting on ships and docks, waiting to be trucked to dealerships and factories across the United States.3
More expensive cars and parts also make repairs and replacements costlier. As of October 2021, average car insurance claim costs were up 20% and the cost of parts were up 6%.4 This is another factor affecting the auto insurance market.
There are other factors not related to national and global events that could increase your auto insurance rates:
While some insurance price increases are out of your control, there are things you can do to help get them in check.
In addition to typical coverage, find out if your carrier can provide you with added advantages for safe drivers. For example, Travelers offers:
Talk to your local independent agent or Travelers representative to learn more about car insurance and money saving discounts.
Looking to save on your life insurance coverage? A health screening is a critical part of the application process that can help you get your best rate.
As we grow and change, the choices we make in life often mirror our needs. Your financial protection needs work much in the same way. What you need in your 20s is not likely to match what you need in your 40s, which will further evolve as you approach your 60s and beyond. Luckily, AAA Life has solutions for you every step of the way.
Did you recently tie the knot? Or maybe the big day is fast approaching. It isn’t uncommon for couples to spend a great deal of time and energy planning for their wedding day. What’s more rare is the likelihood that couples put time and energy into discussing their financial future and how to approach finances in their marriage.
There’s no one-size-fits-all solution when looking at the needs of Generation X and their life insurance policies. Whether you’re planning to retire in the next few years, still have kids living in the house with years of college tuition checks still to come, or anything in between, now is the best time to act to help protect the futures of those that you care about.
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