Why is auto insurance getting more expensive?

It’s common to see a premium increase at your next auto insurance renewal after filing a claim or receiving a speeding ticket. However, when you haven’t had a ticket, filed a claim or made a change to your policy, an unexpected rate increase can leave you searching for answers.

As an Elephant Insurance policyholder, we understand the frustration this can cause. Insurance rates fluctuate for various reasons and it’s essential to be aware of the factors influencing these changes. Economic factors in the market can cause nation and state-wide premium increases that impact all policyholders. While many of these factors are beyond your control, understanding the reasons behind rising premiums will help you to make more informed decisions about your insurance.

Factors that affect all auto insurance premiums include:

1. Economic inflation and cost of repairs
   The rising cost of new and used vehicles have made providing coverage more expensive for insurance companies. Repairs are also more costly as the price of vehicle parts increase, especially for vehicles with more advanced electronic parts.
2. Labor and manufacturing shortages
   Slowdowns in the supply of vehicle parts and a shortage of auto repair technicians have resulted in longer repair times and an increase in length of time needed for rental vehicles, which can be costly.
3. Accident frequency
   Post-pandemic, more people are back on the roads which increases the likelihood of an accident. The number of claims due to distracted driving has also increased over the past several years. More accidents mean higher repair and medical costs for insurance companies.
4. Rising healthcare costs
   The continuous increase in medical costs, such as for hospital stays and medical treatment after an accident, impacts insurer expenses for bodily injury coverage.
5. Natural disasters
   Severe weather conditions like snow, ice, and rain contribute to a higher number of auto accidents and weather-related vehicle damage. Those living in disaster-prone areas are likely to see their premiums affected.

The above examples relate to economic and market condition trends. To learn more about general rating factors that contribute to the overall cost of your premium, check out our blog post here.

What can Elephant policyholders do to help manage their insurance premiums?

While external factors may influence rates across all insurance providers, Elephant is committed to helping you navigate these challenges. Here are some tips to help manage your coverage and get your best rate possible:

1. Explore available discounts
   Maybe you have a student away at school, currently work from home, or have the ability to pay-in-full for your policy. All of these and more could result in additional savings. See a full list of potential discounts here.
2. Bundle your coverages
   Maximize your savings by bundling your insurance policies under one roof with Elephant. Take advantage of our multi-policy discount when you bundle homeowners, renters, motorcycle, or life insurance with your Elephant auto insurance.
3. Keep your policy information up to date
   Periodically review your coverages, drivers, vehicles, and personal details on your account. It’s easy to forget to update your auto insurance policy when you move or have other major life changes, but keeping your information up to date ensures that you’re receiving the most accurate rate.
4. Flexible payment options
   You can make payments and manage your billing contact-free through the Elephant Insurance mobile app, your online account portal, or our automated phone system. If you need additional assistance, chat with us online or give us a call to discuss the options available to you.

No one protects like Elephant. Chat with us about your available discounts, or to review your policy information, by logging in to your online account or calling us at (877) 218-7865.

Sources:

1. https://www.bankrate.com/insurance/car/rate-increases-in-2023/
2. https://www.marketwatch.com/guides/insurance-services/why-did-my-car-insurance-go-up/
3. https://www.bls.gov/opub/ted/2022/consumer-prices-for-shelter-up-6-6-percent-for-year-ended-september-2022.htm
4. https://www.iii.org/article/why-did-my-auto-insurance-costs-go-up-even-when-i-didnt-file-a-claim