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Rising Auto Insurance Premiums


Christian talk radio with Rob West

April 28, 2022

Costs seem to be rising for almost everything under the sun these days. Unfortunately, auto insurance rates are no exception. Today on MoneyWise, we’ll tell you why and offer you some tips on how to lower your premiums. So NerdWallet is reporting that car insurance premiums are expected to increase even though the number of claims was down last year. Blame it on the far-reaching effects of the pandemic that’s led to supply chain interruptions, the shortage of new and used cars and a spike in reckless driving. Another reason for higher premiums is that vehicles are more expensive than ever, and that means repairing them is more expensive, too. The cost of used cars and trucks has jumped 37-percent over last year, and the average cost for a new, non-luxury vehicle is now $43, 000 according to the Bureau of Labor Statistics. Plus, new vehicles now come with all kinds of fancy new gadgets that cost a fortune to repair or replace, driving up premiums. These include systems that help you park, cameras and all types of sensors. Repair shops are also charging more these days, driving up insurance rates. Much of that is due to the rising cost of parts. So what might seem like minor accident damage may come with a hefty repair bill. There’s also a shortage of qualified auto mechanics, which is expected to continue in the years ahead. This is due in part to the increasing complexity of automobiles and the need for more and better training programs. And would you believe that the pandemichas also caused premiums to rise? Even as people began to drive less as work-from-home opportunities became more available, they also began to drive more recklessly. Accidents caused by distracted drivers have been on the rise for several years, largely due to folks looking at cell phones, and it’s not clear yet whether hands free laws are having the desired effect. The National Highway Traffic Safety Administration reports that distracted driving accounts for nearly 10-percent of fatal car accidents. Then came the pandemic, and reckless driving seemed to go into overdrive as folks began to speed more. Erie Insurance conducted asurvey of 500 U. S. drivers that revealed 1 in 10 drivers were driving much faster than before the pandemic up to 20 miles per hour over the speed limit. Now you’ve got to be wondering why that’s the case. Why would the pandemic cause people to speed? The survey asked that question, and here are the top reasons that drivers gave: ●The roads weren’t congested, so drivers felt safe driving over the speed limit. ●It seemed like there was far less law enforcement out, so folks felt they weren’t likely to get a ticket. ●And even the empty roads were a good opportunity to see how fast my car could go. All of these factors are causing auto insurance rates to increase. So what can you do about it? HOW TO LOWER YOUR COST First, check with your insurance company to see if there are any discounts that you’re not aware of. Examples might be signing up for electronic billing and auto pay. Your insurer might also offer a discount for taking an online defensive driving court. If there’s a safe driver discount, you’ll definitely want to avoid getting a ticket. You can also increase your deductible. That will lower your premiums. Just be sure to keep the amount of your deductible in your emergency fund. If you’re driving an older car, you can drop comprehensive and collision coverage. But again, you’ll want to have enough in savings to replace your car if need be. And finally, shop around for lower rates with other insurers. They typically offer lower rates to new customers, then gradually increase them over the next several years. So switch to another company could save you some money. On today’s program, Rob also answers listener questions: ●Should you move a pension or roll it over into something like an IRA? ●How should you manage I-bonds and are they a good gift for grandchildren? ●Can you sell a home that’s in forbearance? RESOURCES MENTIONED ●Find a Certified Kingdom Advisor

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