There are several reasons that caused premiums to rise in recent years, some factors are purely economic and others are related to the vehicle owners, such as age or driving history.
An expert company in insurance for vehicles, property, and other assets revealed the reason why car insurers are increasingly raising their rates. Experts detailed that it is not attributed solely to one reason, but there are a series of factors driving the increase. Some relate to inflation, while others have to do with how a person drives and even where they live.
Why is car insurance so expensive in the US?
The InsuranceHubPortal, a company that compares the rates of more than 200 insurance policies offered in the United States, explained that 2022 saw one of the largest increases in auto premiums. The average cost went from US$1,483 to US$1,529. The main factor was inflation, an economic phenomenon that also caused increases in the price of new and used vehicles.
Additionally, insurance companies have been forced to raise their rates as the cost of doing business has risen. Labor shortages and disruptions to supply chains caused insurers’ operating expenses to soar.
However, there are other reasons that have to do directly with the person who hires the service and not with global economic phenomena, such as age. Drivers under 25 years of age usually have higher rates compared to older people. This is due to the lack of experience behind the wheel, which could generate greater risks. The specialists assured that a motorist between 16 and 24 years old will pay 136% more for their insurance than someone between 25 and 75 years old.
Likewise, members are subjected to a credit history analysis, since an investigation by the Federal Trade Commission (FTC) showed that people with a negative review file more complaints than drivers with high scores. of high credits. Typically, those with a bad credit record pay an extra US$2,063. Recent traffic violations could also cause an increase in your insurance premium, especially those related to speeding and at-fault accidents.
Florida, with the most expensive car insurance
Insurance prices are regulated at the state level, so each entity has a different one. In that sense, Florida occupies third place on the list of the most expensive, with an average figure of US$2,425 per year. The above is mainly due to a purely climatological issue: hurricanes and floods. Companies are forced to pay large amounts of money for the recurring claims that their affiliates make after these phenomena occur.
In addition, their rate remains one of the most expensive because they implement no-fault insurance, which means that companies will cover the medical expenses of any accident, regardless of which driver caused the accident. The goal of this method is to reduce small claims court actions, as these often delay the reimbursement sought by the injured party.
