Car insurance rates continue to climb as inflation, changing driver habits, labor shortages and issues with the supply chain all put pressure on car insurance premiums. A rate increase can be an unwelcome surprise, particularly if you are already struggling to cover the cost of your car insurance. Are going up across much of the country. This is due to inflation driving the cost of cars and repairs and increasing accidents and claims. As insurers pay more to deal with claims, they pass that increase to their customers.
Inflation
The all-items Consumer Price Index increased 5% from March 2022 to March 2023 before seasonal adjustment, according to the U.S. Department of Labor. The average transaction prices of car sales in March 2023 are 30% higher than they were in March 2020, according to Kelley Blue Book.
“The latest transaction data from March reveals new-vehicle prices continued a downward trend through the first quarter of 2023,” says Rebecca Rydzewski, research manager of economic and industry insights for Cox Automotive, the parent to Kelley Blue Book. “Both luxury and non-luxury prices were down month over month. We’ve been anticipating transaction price declines as inventory has steadily improved and choice has expanded. More vehicles on dealer lots – and on their competitors’ lots – means dealers simply don’t have the pricing power they did six months ago.”
When vehicle costs go up, insurance will not be far behind. Insurers must cover the cost to repair or replace a car, and if their costs increase dramatically, they will pass that cost on to policyholders.
Pricey repairs and parts
The industry has struggled with a worldwide microchip shortage, and car parts costs have risen. Higher prices for parts push up the cost of repairs for insurance companies. These additional costs are passed to policyholders via rate increases.
“The high price of high-tech in cars was already affecting repair costs, but these current extreme marketplace conditions have pushed insurers to increase premiums as they also try to keep up with spiking crashes and catastrophic events. This is also complicated by a shortage of rental cars and longer time in a rental after a crash due to lengthier repair and replacement times,” says Carole Walker, executive director of the Rocky Mountain Insurance Information Association.
Repair delays also mean that insurers are paying for rental cars for more extended periods while policyholders wait for their vehicles to be repaired, costs that will eventually result in higher premiums.
Labor shortages
In addition to supply chain issues, labor shortages make finding skilled workers to repair vehicles more challenging. When the pandemic first hit, auto dealers and repair shops laid-off workers, some of which never returned to the industry after finding new jobs elsewhere.
Everything has gotten more expensive since 2021. Gas prices passed $4 per gallon for the first time in 15 years and peaked at more than $5 per gallon. Food prices climbed 11.4% in 2022 compared to 2021. And auto insurance rates have increased 17.1% over the past year, according to the U.S. Bureau of Labor Statistics’ consumer price index.
Part of that increase is because cars have become more advanced, with features like backup cameras and anti-lock brakes. And more advanced cars mean more expensive car repairs: Vehicle repair costs were up almost 20% this May compared to the previous year, according to the consumer price index.
Here at Capital Insurance Service,
we worked very hard to put together a designated team of licensed, knowledgeable and friendly insurance agents
That are ready to service anyone in need of life insurance policies.
We offer mortgage protection insurance, that will benefit any homeowner:
- Full Mortgage (the homeowner gets a life insurance policy for the full mortgage example $300k)
- Half and half (this option will provide enough money to refinance the home, pays half of the mortgage)
- Payment protection (this option will cover for 2 or 3 years of mortgage payments)
As an insurance agency, we have access to a lot of different types of policies.
We present to our clients all their options and together we find the best fit for them.
Keep on mind that, we work with a lot of insurance companies, this always allows us to find the perfect policy for our clients’ needs and budget.
We have access to:
IUL
Whole life
Term
Term w return of premium
Final expenses
And more.
AUGUST 1-6, 2023
WELCOME TO THE RENO-SPARKS MAIN EVENT
THE LARGEST NOSTALGIC CLASSIC CAR EVENT IN THE COUNTRY
36th annual Hot August Nights
when a driver’s license and a hot car were all, anyone needed or wanted on a Saturday night. Join us for a trip down memory lane or a new adventure. Whichever way you look at it, this nostalgic event has it all.
DUCK RACE
This year the Duck Race will be live-streamed from our Reno shelter. Our shelter pets will be competing in fun games to win YOU prizes! There will be five games total, and each game will identify a Duck Race prize winner. The games will include; Kitten Races, the Pooch Plunge, Agility Course Challenges, an obstacle course challenge for our shelter staff kiddos and a Pie Eating Contest.
Even though this year’s Duck Race is a little different than in years past, we can assure you it will be loads of fun and every duck you purchase will get you one step closer to winning one of our amazing prizes – including your choice of a brand-new car or $10,000 generously donated by Carson City Toyota!
The Duck Race provides Nevada Humane Society with essential funding that ensures we can continue our lifesaving work to care, and provide homes, for Northern Nevada pets in need. We will continue to update you on our latest event details through our Duck Race website and social media channels. Please stay safe and healthy and we thank you for your continued support of Nevada Humane Society and our annual Duck Race event.
