Blog

By Erie - by Josh West 

At Assure America, we don’t take the price you pay for car insurance lightly. Like most companies today, we’re facing increased costs of doing business. And we know that you are facing rising costs too, on everything from gasoline to breakfast cereal to housing.

And while a lot of factors go into what you pay – from vehicle safety ratings to your personal driving history – striking the balance between insurance premiums and the cost of doing business is key to any insurer’s ability to meet customer expectations and pay for claims.

See also: What Determines the Price of My Auto Insurance?

For questions about your specific auto policy and rate, reach out to your Assure agent. Generally speaking, though: Here are some of the biggest factors that may cause auto insurance premiums to increase in 2022:

• Inflation: The Consumer Price Index (CPI) rose more than 7 percent compared to 2020 – the biggest increase in nearly 40 years. This means that on average, all of us are spending 7% more than we were a year ago for the same goods and services.
• Vehicle parts: The inflation we were just talking about is even higher when it comes to vehicle parts, with those prices up by closer to 10%. (Historically, an increase of 2 to 3% year over year is more typical.) 
• Repair costs: Recent supply chain issues such as the car chip shortage and labor market pressures have driven up repair costs even more, by as much as 20% since 2020. Limited supplies and labor can also cause repairs to take longer, meaning customers are in rental vehicles longer—further driving up the cost of claims. 
• Vehicle prices: Prices for used vehicles jumped more than 27% in 2021, according to the auto industry analysts at Edmunds. New vehicle prices are up more than 14%. 
• Driving again (and faster): As driving returns to pre-pandemic levels, Americans are going faster than ever before. In a national survey commissioned by ERIE, 1 in 10 drivers admitted to driving at extreme speeds of 20 MPH or more over the speed limit.
• Accidents: It should be no surprise based on all that fast driving, but auto accidents are getting more severe, too. The National Highway Traffic Safety Administration has reported a 12% surge in fatalities, the largest increase since reporting began in 1975.

HOW TO SAVE ON YOUR AUTO INSURANCE

While we want to do our best to explain what’s behind the increased costs you might see in your insurance bill these days, we also understand that doing that doesn’t put any more money in your pocket. So here are a few ideas that might.

• Ask about pay plan discounts. Depending on which plan you choose, you can save up to 7% on your auto insurance.
• Take a look at your deductibles. Consider a higher deductible to lower your auto insurance premium. Read our guide on how to choose a deductible.
• Revisit your mileage. Are you working from home and driving less than before the pandemic? You may be eligible for a lower rate based on annual miles driven. (Reduced usage discount not available in Kentucky.)

REMEMBER: YOU AREN’T ALONE.

When you’re with Assure America, every car insurance policy comes with a knowledgeable agent in your area. 

Your agent is there to help you understand and navigate all the variables that impact your rates. Find a local insurance agent near you to understand what coverage you’re buying, why it matters, and how it works.

Not an Assure customer yet? See if Assure America can offer a more affordable car insurance rate and get a quote.