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Wondering why your car insurance keeps going up? Inflation may be the reason. Here’s how the economy impacts your auto insurance rates. (Shutterstock)
Like many Americans, you may have noticed a premium increase on a recent billing statement from your auto insurance carrier. Maybe you’ve asked yourself: "Why does my car insurance keep going up?"
Your car insurance premium can rise for a variety of reasons, like when a discount expires, your vehicle usage increases, or if you get a speeding ticket.
The economy can also be a factor in your car insurance rate. Keep reading to understand more about the relationship between car insurance premiums and the economy.
Visit Credible to learn about auto insurance and get quotes from top carriers.
When the pandemic began in 2020, lockdowns kept many drivers off the road, resulting in a profitable year for insurers. Many insurance carriers even issued rebates to their policyholders or reduced rates, according to a Wall Street Journal report.
The economic story of 2022 has been massive inflation driving up costs in nearly every industry. In fact, between June 2021 and June 2022, the Consumer Price Index spiked 9.1%, a 40-year high. That means you’re spending 9.1% more on goods and services than you were a year ago.
As such, you’re paying more to fill up your gas tank, put food on your table, and, yes, insure your vehicles. Many auto insurers are raising premiums by 6% to 8% or even higher in some cases, according to The Wall Street Journal.
In the face of higher prices, it might be tempting to save money by reducing your car insurance coverage, but that may not be a wise move. While you may save on your monthly premium with lower coverage amounts, you could end up with higher out-of-pocket expenses after an accident.
A number of factors contribute to insurance premium increases, many of which are outside your control. For instance, the volume of auto accidents and their costs are an auto insurance pricing factor in every state, according to the Insurance Information Institute.
Other factors causing the auto insurance market to raise insurance rates for drivers include:
Credible makes it easy to compare auto insurance rates from multiple carriers, all in one place.
You may not be able to control the premiums in the auto insurance market, but you can take steps to lower your auto insurance rates, such as:
Keep in mind, car insurance premiums typically change from year to year. Implementing the above steps may help you fight rate increases and make your premiums more manageable until inflation tamps down.
If you’re ready to get auto insurance quotes, Credible lets you quickly and easily compare insurance rates from top carriers.
Quotes displayed in real-time or delayed by at least 15 minutes. Market data provided by Factset. Powered and implemented by FactSet Digital Solutions. Legal Statement. Mutual Fund and ETF data provided by Refinitiv Lipper.
This material may not be published, broadcast, rewritten, or redistributed. ©2023 FOX News Network, LLC. All rights reserved. FAQ – New Privacy Policy