I have no tickets or accidents ... why is my auto insurance going up?

Whats to Blame?

  1. More cars being totaled instead of repaired:  A 2024 Bloomberg report noted that over one-fifth of vehicles involved in crashes were being totaled, a near-record high, partly due to high repair costs driven by parts shortages and the complexity of modern vehicles. This means some vehicles were totaled because insurers would not cover extended rental car costs or parts were not available. In 2022 automotive parts costs rose 17% therefore making it too expensive to repair some cars that were damaged in auto accidents. So the insurance companies had no option other than to total a car that just a few years earlier would have been repairable.
  2. Shortage of Mechanics:  There is nationwide deficit of skilled technicians projected to reach 795,000 by 2027. This has forced repair shops to raise wages to retain and attract talent. These higher costs will be passed on to consumers through higher repair costs, making claims for repairs to automobiles much more costly than just a few years ago.
  3. Increase in Weather related Claims:  Losses due to hail storms, fire and hurricanes have increased and this factor has contributed to the rise in pay outs for automobile claims.
  4. Distracted Driver accidents:In 2021 the NHTSA reported that 8% of fatal crashes involved distracted driving, with cell phone use being a major factor. The CDC statistics are about 1 in 5 crashes involve some form of distraction with cell phones being the leading cause. A 2019 study found that 44% of teens admitted to texting while driving. In 2020 NHTSA noted 1.6 million crashes annually are linked to cell phone use.
  5. Uninsured Drivers:  Roughly 14% of drivers are uninsured, with that figure rising due to higher insurance rates as consumers feel the financial pressure to drive uninsured. Uninsured drivers have a 34% higher accident probability than insured drivers. If an insurance company pays out for an accident involving an uninsured driver the insurance company is actually out the money they would have collected from the uninsured company if they were insured. This means rates must go up to compensate for the loss.