Why are insurance rates going up?
A number of pandemic-related trends are driving up auto insurance rates throughout the industry. Inflation has possibly had the biggest impact — as the cost of goods and services goes up, so too does the cost of protecting our customers on the road. Here's a more in-depth look at these trends and how they impact car insurance rates.
Why auto insurance rates are increasing
Repairing & replacing vehicles costs more
The auto industry has seen its share of labor shortages and supply chain disruptions over the past year. As the TechForce Foundation reports, the demand for transportation technicians outpaces supply by an estimated 5 to 1, leading to higher labor costs. Strained supply chains have also caused prices for auto parts and vehicles to spike dramatically. Altogether, these factors led to a 6.3% increase in the cost of vehicle repairs and maintenance between February 2021 and February 2022, as well as a 41.2% spike in used vehicle prices.
As repair costs go up, the amount insurers pay to fix their customers' vehicles also goes up. Likewise, as vehicle values rise, insurers pay more to help replace their customers' totaled cars and trucks, all of which increases the cost of auto insurance.
Accidents are increasing, leading to more claims
Changes in driving behavior are also impacting insurance rates. The number of car accidents has gone up, leading to more insurance claims. This higher claims volume, coupled with higher vehicle repair and replacement costs, is ultimately what's driving insurance rates up throughout the industry.
Ways to Save
How you can lower your insurance rate
We're here to help you save as much as possible on auto insurance. Here are just a few steps you can take to lower your rate:
Maximize your discounts
See what auto insurance discounts you're eligible for that you aren't taking advantage of yet.
Take Snapshot® for a spin
Snapshot personalizes your car insurance rate based on your driving habits. The safer you drive, the more you could save.
Review your policy
Give us a call to see if there are any policy tweaks you could make to save more.
Explore our payment options
Paying in full or setting up automatic payments can easily save you more with a discount (Note that these two discounts cannot be combined).*
Keep in mind that there are many other factors besides inflation that impact car insurance rates. If you have questions about a recent rate increase, please contact us. We'll answer any questions you have and help you find more ways to save on your Progressive auto policy.
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