With changing economies, it’s not uncommon to see costs increase. There are several factors that can contribute to these changing costs. From gasoline, to housing, to the cost of your insurance, everything is affected in some way or another.
Inflation: The Consumer Price Index (CPI) rose by 4% compared to 2022. What this means is that all of us are paying 4% more for the same goods and services we paid for a year ago.
Vehicle parts: The car industry was even more affected by inflation. The cost of vehicle parts rose by closer to 8.3%. This is a pretty significant increase when typical increases range between 2 or 3%.
Repair costs: Recent supply chain issues such as the car chip shortage as well as labor market pressures have caused repair costs to increase even more, by as much as 14.2% since 2022. On top of that, limited supplies and fewer workers can cause repairs to take longer. Because of this, customers are forced to use rental cars for longer periods of time, resulting in the cost of claims increasing as well.
Vehicle prices: The cost of used vehicles increased more than 27% in 2021. New vehicle costs are up more than 14%.
Driving again (and faster): Drivers are driving their cars faster than ever before, reporting to be driving at extreme speeds of 20 mph over the speed limit or even more.
Accidents: It makes sense that because drivers are driving much faster, that auto accidents have not only increased in frequency but also in severity. The National Highway Traffic Safety Administration has reported an increase of 12% in fatalities. That’s the largest increase since reporting began in 1975.
How You Can Save on Your Auto Insurance
Ask about pay plan discounts
Consider ERIE’s Rate Lock option. With this feature, your insurance premium will remain the same year after year, even if you have a claim. The only way your rate will change is if you add or remove a driver to your policy, add or remove a car, or change your address.
Look at your deductibles. If you have a low deductible, that probably means your insurance premium is higher. By increasing your deductible (what you pay upfront before your policy kicks in), your insurance premium will be significantly less.
Review your mileage. Are you working from home more often and driving less than before the pandemic? You could be eligible for a lower rate based upon how many miles you’ve driven in one year.
Bundle your policies. If you only have auto insurance, by adding a homeowners insurance policy or an umbrella policy, your rates will decrease.