Car Insurance Rates Are On the Rise Due to Increased Accidents and New Tech
If you have not yet noticed an increase in your car insurance, brace yourself – you may soon see an increase on your bill. Even drivers with spotless records are seeing rates rise, as Forbes points out, “Since about 2012, rates to insure vehicles have gone up in all states and for all drivers, even including those with spotless driving records and no claims. And not by negligible amounts. Since 2012, the consumer price index (CPI) for auto insurance has gone up by 21.5%, compared with a rise in the overall consumer price index of 4.5% over that same five-year period. It’s the largest five-year growth of auto insurance costs since the early 1990s.”
While insurance companies cannot simply raise your rate just because they want feel like it, insurance companies are still raising their rates across the board. Not only are insurance companies losing money trying to cover the rise in accidents but new cars have a wide variety of new technology that must be insured and that is raising the cost of insurance also. While many new technology features are improving car safety that technology is also expensive. If an accident happens it is expensive for an insurance company to replace that technology so they must raise rates to protect against significant losses from technological advances in automobiles. The Chicago Tribune further discusses how automobile technology is going to continue to increase insurance rates, “State Farm’s recent 5.9 percent increase in Illinois auto insurance rates was driven in part by smart car technology, the company said Wednesday. A dinged front bumper becomes a more expensive repair when it also includes fixing a collision avoidance sensor. “Cars are just getting more expensive to repair, due to the technology,” said Missy Dundov, a spokeswoman for Bloomington-based State Farm, the nation’s largest auto insurer.”
These increases in the cost of insurance may make some consumers think twice about how many smart technology features they choose to have in their car since it may impact their insurance rate. But ultimately, many of these technological feature benefits far outweigh the increase in insurance costs. Additionally, some features such as Gorilla Glass windshields have smart features and cost more but also weigh significantly less than traditional windshields which yields a savings in the cost of gas because the car is far more efficient.
