It’s no secret that rising costs for groceries, gas, and everyday items have become a challenge for many households. However, there’s one area that’s often overlooked in the inflation discussion, and that is auto insurance premiums.
How Inflation Affects Auto Insurance Premiums
As inflation seeps into various sectors, it directly impacts what you pay for coverage.
Here’s a closer look at why this happens and what you can do about it.
Rising Claims Costs
Between 2013 and 2023, the average price of auto insurance increased by 63.8%.
Repairs are getting pricier, and medical expenses tied to accidents continue to climb. This leads to higher insurance payouts, often translating into increased premiums for policyholders.
Vehicles Cost More
Modern vehicles are often equipped with advanced technology, from safety features to complex electronics. While these innovations make cars safer and more efficient, they also lead to more expensive repairs or replacements, pushing premiums higher.
According to data from Kelley Blue Book, the average cost of a new car was $48,623 in October 2024. That is a significant increase from 2019 when the average cost was $38,259.
Increasing Legal Costs
Legal fees for accident claims have increased, especially for accident-related cases. Insurers have to pay for this and usually charge customers more because of it.
Supply Chain Strain
Global supply chain disruptions have made obtaining parts for vehicle repairs harder and more expensive. This drives up the cost of fixing a car after an accident, increasing overall insurance claims and, consequently, premiums.
Strategies to Help Lower the Cost of Auto Insurance in Fargo
Here are six proactive strategies to implement to help you keep insurance costs down amidst inflation.
- Drive Safely
Minimizing your risk of accidents is the best way to reduce your insurance costs. Safe driving means fewer claims, leading to lower premiums over time.
- Rethink Your Coverage
Take time to review your policy. Ensure you have the appropriate level of coverage for your needs without paying for unnecessary extras. Adjusting coverage can uncover potential savings.
- Raise Your Deductible
Opting for a higher deductible can lead to lower monthly premiums. Make sure the deductible is still an amount you can afford to pay if you need to file a claim.
- Inquire About Discounts
Many insurance providers offer discounts for safe driving records, bundling policies (such as auto and home insurance), or completing defensive driving courses.
Be proactive and ask about any available discounts.
- Ask About Usage-Based Car Insurance
For drivers who don’t cover many miles, usage-based insurance can be a cost-effective choice. These plans use your driving habits to determine premiums, potentially saving money if you drive less frequently or more safely.
- Get Multiple Quotes
Don’t settle for the first quote you receive. Comparing rates from different insurance providers can help you find better deals tailored to your needs and budget.
Commitment to Supporting Fargo Insurance Policyholders
At Fargo Moorhead Insurance, we understand that rising premiums can be a burden. Our commitment is to help clients manage these increases through personalized policy reviews that ensure they get the best possible coverage at a fair price.
Contact us today to explore ways to keep your insurance costs manageable without compromising on the protection you need.