As car renewals are taking place in 2023, many drivers are noticing an increase in their premiums. All across the country, insurance companies are raising their rates. But, in New York State, which has a higher cost of living than other parts of the country, car insurance rates will increase by over 8%.
Here’s Why:
New York State Played a Part
The jump in auto insurance prices can be attributed to several things. One of the reasons is that New York State mandated that insurance rates were not allowed to be increased during the recent pandemic. Now that COVID-19 is mostly behind us, the mandate has been lifted and companies are responding to the inflation and other factors that have contributed to the rising cost of insurance. Read on to learn more.
Pre-Pandemic Lifestyles are Returning
Since the pandemic has consistently been winding down, many people are driving more often–whether to go to work or to travel for leisure. This means there’s going to be a higher volume of accidents and insurance claims, which causes insurance companies to raise their rates.
Inflation – Driving Up the Cost of Claims
Another reason insurance rates are higher is due to inflation. Everything costs more in 2023 including the higher cost of auto parts for repairs. Also, a worker shortage in the car repair industry adds to labor costs and it also costs more for rental cars. Even medical costs have risen and insurance companies are paying more to cover accident-related injuries. The good news is that economists are predicting that we may see a slowing in inflation by the end of 2023, though it could take some time before consumers see positive results in the cost of…everything.
Climate Changes Mean More Claims
Catastrophic events caused by extreme weather conditions also drives auto insurance costs higher. When there’s mass flooding, or devastating hurricanes, cars get damaged or totaled. Repairing or replacing them is more expensive than it was several years ago which also contributes to the rate increases.
Driving Electric
More people are doing their part to reduce the use of fossil fuel by purchasing electric vehicles. They cost more to insure than gas-powered vehicles
What You Can Do!
Consumers have some options to help with the rising cost of auto insurance.
1. Work on Improving Your Credit Score
If you have a poor to fair credit rating, you are likely to have to pay a higher insurance rate–even if your driving record is spotless. Some insurance companies will use consumer credit scores as one of several factors to assess drivers’ likelihood of filing an insurance claim.
2. Get Other Insurance Quotes
High auto insurance costs are resulting in drivers looking for lower rates. Seek out three or four quotes from different insurance companies to see if they offer lower rates.
3. Purchasing a New Car?
If you’re in the market for a new car, you can keep insurance costs down by considers models that cost less to insure. Crossover vehicles typically tend to be less expensive to insure vs. a large pickup truck or S.U.V.
4. Older car? Reduce Your Collision Coverage
An older model car will cost less to fix or replace, if you file a claim. A cost-saving option would be to reduce your collision and comprehensive coverage. Your insurance agent will help you determine the right amount of coverage to choose.
5. Save by Choosing a Higher Deductible
Raising your deductible amount, which is the portion of a claim bill that you are responsible for before the insurance company pays, can save your money on your insurance costs. For example, raising your deductible from $500 to $1,000 will save you an average of about 10%.
CONCLUSIONS
We’ve explained several steps you can take to offset the current higher insurance rates, but it’s always a good idea to meet with your insurance agent to learn the benefits and the downfalls of each of the cost-saving measure you’re considering. Talk with one of the agents at Mitchell-Joseph Insurance to help you make the right decisions about your auto/vehicle insurance. Call (585) 624-2180 or CONTACT US via email.