If you’re hoping for a bit of a break on auto insurance rates, the news isn’t good for 2018. A recent report from some of the top automotive insurance companies shows that underwriters aren’t recouping the losses that their policies are designed to cover. In short, this likely spells higher rates for you in the coming year. While this news can be discouraging, it doesn’t mean that motorists in Colorado are helpless to stem the tide and bring rates back down. Let’s take a closer look at the most recent trends and investigate why auto insurance rates are rising.
In 2016, auto insurers saw a rise of rates almost across the board as evidenced by analysts in this report. When insurers raise rates, it’s usually in anticipation of a higher amount of claims and greater losses in the coming year. In 2016, underwriters forecasted that losses were going to rise, and guess what – they were right. The problem is they didn’t adjust rates enough, and many insurers still reported losses. Well as you can guess, this isn’t good news for the typical auto customer as we look at upcoming rates for 2018.
There are several reasons why auto rates are rising fast for most consumers. Here are three to focus on.
Accidents / Fatalities Rising
First and foremost, accidents and auto fatalities are up, which is a trouble trend for anyone who owns a vehicle. The reason for more accidents is complex, and it has to do with increased population growth in many areas, reluctance to follow traffic laws by many motorists, and of course the rise of texting and driving among motorists of all ages. Unfortunately more motorists are not making it home safe each day, and this trend is causing havoc in the insurance markets, not to mention in the lives of many families across the nation. Auto insurance rates have been steadily rising as a result.
Cars Are Becoming More Complex
Secondly, auto repairs are becoming more costly as automobiles become more complex and replacement materials become more expensive. Gone are the days of hammering out a ding in your vehicle. Now even a small hail repair job can cost several thousand dollars, not to mention the costly repairs that come from collisions. High repair costs equal high claim amounts, and this too drives up auto insurance rates.
Auto Insurers Estimates Are Failing
Finally, many underwriters aren’t getting the results they expected out of their yearly estimations. Auto insurance is by far the most technologically advanced segment of the insurance industry, but overall this sector is not predicting its losses as accurately as you would expect. We can likely count on the estimations and models that insurance companies run to become more accurate in the coming years, but as for now there is still a ways to go as far as accuracy is concerned. More drivers sharing data in the future will help, especially with discount options attached for those that share data with their insurer. For now, auto rates are rising because the automotive segment of the insurance industry is far too unpredictable.
So What Now?
The good news is auto insurers don’t necessarily anticipate this trend to continue. Advances in risk assessment, especially given the high tech nature of auto insurance, promise a more balanced market going forward. Better yet, such a competitive market creates opportunities for customers looking to compare rates. While some insurers may raise rates, others will maintain lower prices to bring in new customers as well as keep their primary customer base satisfied. Remember only an independent agent can compare rates from different insurance companies. A captive agent works for only one insurer and will only be able to sell you that one company’s services.
While the general news of rising auto rates may be a little depressing, there are plenty of bright spots to focus on here. First, auto insurers are aware of the problem and they are scrambling to fix it. It’s no secret that lower rates mean more customers in today’s market, and insurers don’t want to lose their customer base. This also means that if you see an unacceptable raise in your 2018 rates, you still have options with other companies offering more competitive rates. Square State Insurance is your best option to evaluate the coming auto insurance fluctuations. We can compare your current coverage with other reliable options to keep your insurance bills low. Contact us today for more information.