MEMPHIS, Tenn. — If you are feeling like your last bill for your car’s insurance was higher than it should be, you are not alone. Across the country, rates are higher than they have been in decades.
The latest consumer price index shows car insurance prices have gone up 18.9% from what they were this time last year. This is the largest jump in rates since 1976.
Viewers told us these new bills have been putting a strain on their wallet.
As for why this is happening, insurance experts said there is a variety of reasons.
“Insurance companies are spending more money fixing cars than they were,” said Michael Cox, Meineke Car Care Center Manager, who also said his USAA insurance jumped about 15% in recent months.
The Tennessee Department of Commerce and insurance said inflation is a major factor in why these rates continue to rise.
The department sent a statement to ABC24 saying the following:
Rapid increases in overall economic inflation continue to drive up auto insurance losses. Insurance claims inflation has continued to rise faster than the underlying consumer price index, far outpacing increases in premiums. Among the factors fueling the increases:
- Shifts in driving habits—more driving, deterioration in driving behavior
- Cost of medical care continues to rise
- Impact of legal system abuse on injury claim settlements
- Injury severity costs overwhelm reduction in miles driven
- Auto repair and replacement costs continue to increase faster than collateral protection insurance (CPI)
Other insurance experts also said crime and increased rates of severe weather also play a role in making premiums more expensive.
“The more claims that are filed, the more loss that there is. That’s just going to make rates go higher. Unfortunately, we’re seeing more people live in harm's way,” said Scott Holeman, Insurance Information Institute.
While it may be overwhelming, Holeman said there are still several things you can do to keep your bills from going out of control.
“Insurance is still a very competitive field, and that’s the good news, so there are things that you can do to lower your risks and hopefully lower your rates,” said Holeman.
The best thing for drivers to do right now is show around for different options and check in yearly with their insurance provider. It is important to update them on where you are in life, as there might be a discount you qualify for, such as one for working from home and one for parking in a garage as opposed to a street.