Paying bills is never fun, especially when you notice that you’re paying way more than last time. But it’s at least an easier pill to swallow when you remember that you made an international call or you streamed a lot more than usual that month.
When it comes to car insurance, it’s confusing to see that you’re suddenly paying more when you’ve never even filed a claim before!
Premium hikes are common especially after an accident where you’re at fault, or after you’ve racked up a couple speeding tickets.
So why did you see your car insurance go up for no reason? Premium increases certainly take into account the risk you have as a driver. But there are also other factors in play.
Let’s take a look at potential reasons behind Allstate rates increasing for you and other auto customers, too.
No, you’re not imagining things. And it’s not just you.
Sometimes, it’s nice to know that you’re not alone in a situation. And trust us, it’s not just you noticing your Allstate rates increasing. But Allstate isn’t the only one raising rates.
Car insurance rates are going up for everyone regardless of your insurance company.
Between 2006 and 2016, car insurance rates rose more than 50 percent for drivers.
Ok but why are auto insurance rates going up for everyone?
At the end of the day, insurance companies are businesses. They want to turn a profit. So as costs rise, so will rates.
And it’s not hard to see why insurers do this. Look at how much they pay out in claims. Each year, they pay out billions of dollars in claims.
To offset the losses, insurers raise rates. This applies to all customers, disregarding your driving record.
Why are my Allstate rates increasing?
There’s no singular reason why your insurance rates have gone up.
But here are a few factors that could be contributing to those premium hikes you’re seeing:
People are driving a lot of miles
Accidents drive up your premium even if you’re not the one getting into any! The more time people spend on the road, the higher the chances of getting into an accident.
Why are people driving more miles? A number of things contribute to it. But one of the main factors is economic growth.
With more people employed, a great number of them are driving to work and driving home. They’re also driving to restaurants, movie theatres, etc. since there’s more income to spend on activities.
People are taking advantage of lower gas prices
Lower gas prices? Expect people to want to drive more.
In a AAA consumer survey, they asked what people would do if gas prices lowered. 33 percent said they’d go on an additional road trip and 27 percent said they’d increase the distance of their trip.
The more time you spend driving, the bigger the chance that you’ll end up in an accident. This’ll involve more claims, and rates will go up for everyone.
Speed limits are getting higher and higher
With higher speed limits, you get to shave off a few minutes of travel time. But that also comes with an increased risk of fatalities. Increased speed limits over the past 25 years have cost nearly 37,000 lives.
Maximum speed limits are set at the state level. Currently, there are 41 states that have maximum speed limits of 70 mph or higher. Six states have 80 mph limits, and drivers in Texas can drive 85 mph on some roads. That could be a factor as to why car insurance in Texas is more expensive than the national average.
With more traffic fatalities, this means higher liability payments, and increased rates across the board.
People are driving distracted
The urge to do anything else while driving is hard to resist. Distracted driving isn’t necessarily about texting or checking your notifications.
Distracted driving refers to any activity that draws your attention away from driving. This includes eating and drinking, reaching for an item, or skipping to the next song on your playlist.
More often than not, distracted driving leads to accidents. In 2017, 3,116 drivers were killed in distracted driving incidents.
Since accidents lead to more potential claims and overall costs for insurance companies, these costs are passed on to all drivers. Even those who make sure to avoid distractions while driving safely.
Catastrophic weather is on the rise
There’s an increase in the number of severe weather and natural disasters happening. In the U.S. alone, severe weather has lead to losses exceeding over $1 billion.
You’re likely to see a rise in your premium if there’s been a recent weather event in your area. This could be a hurricane, blizzard, flood, or fire.
Any natural disaster or severe weather event will increase the number of claims paid out for damages in that area. To make up for this, insurers raise rates for everyone.
Claims push up your premiums (even if you’re not the one filing them)
Even though there’s been improvements to cars, such as safety features, car crashes are still on the rise. Not only that, the frequency and severity of claims filed is growing, too.
Insurance companies are paying out more in claims to keep up with the rise in repair and replacement costs. As cars get more sophisticated with high-tech features, the costs of repairing them or replacing them gets expensive.
It’s not just the payout for repairs that’s rising. There’s also been a rise in the average cost per payout for bodily injury claims. In 2013 it rose 32 percent, to more than $15,500 for bodily injury claim.
Costlier crashes is part of the reason why auto insurance costs are rising.
Am I stuck paying higher and higher premiums?
It might seem that you don’t have any control over your premium. Sure, you can’t control the weather and you’re not responsible for increased pricing for repairs. But there are still a few things you can change to potentially push those premiums down.
Let’s take a look at a few personal factors that contribute to why your car insurance is so expensive.
Coverage
When was the last time you reached out to Allstate to make changes to your coverage? Reevaluating your coverages is always a good place to start when you’re trying to lower your premium.
It’s good to be protected in the event of an accident, but you never want to be paying for coverage you don’t need.
Life changes
Did you happen to see your premium go up after you moved? Even moving a couple blocks away can sometimes increase your rates by more than 60 percent!
Also, if you bought a house, a home and auto insurance bundle can get you a discount at Allstate!
New car
Changed cars recently? If you did, this could’ve increased what you’re paying in monthly premiums.
Different makes and models come with various repair costs. And high-tech features like enhanced safety and security components are costly to repair or replace.
Driving record
Got a speeding ticket? Filed a claim for an at fault accident? All these things will affect your premium quite a bit. Don’t worry, these things won’t be on your driving record forever, but they can stay on there from anywhere between 3 to 10 years.
Make sure you’re practicing safe driving techniques to keep that driving record spotless.
How do I get my premium down?
Make sure you’re driving safely on the road every time you get behind the wheel. This is the best way to get your premiums down.
Another option would be for you to shop around. When shopping, get multiple quotes from different insurance companies. This is the only way to ensure whether or not you’re getting the best rate possible.
If you’ve been in an accident, this shouldn’t stop you from shopping around. Insurance companies actually treat accidents and violations differently.
Even if the quotes aren’t drastically different, it could save you a couple bucks. And switching to another insurance provider could be the answer to getting a lower premium.
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