Will my car insurance be cheaper in 2023? – The colorful fool | CarTailz

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A “perfect storm” led to higher auto insurance premiums.

Important points

  • Motor vehicle insurance premiums are likely to continue to rise in 2023 as well.
  • The underlying reason for most of the increases can be traced back to the pandemic.
  • There are steps you can take to lower your auto insurance premiums, including increasing your deductible, improving your credit score, and shopping.

In a word, no. Car insurance rates are unlikely to go down in 2023. If you haven’t received a premium increase notification yet, chances are you will soon. While motorists are furious (and worried) about the cost of car insurance, there’s solid evidence that increases are inevitable. Most can be traced directly to the global pandemic. As a result, insurance costs are increasing.

Supply chain disruptions

COVID-19 has literally shut down the world for a period of time. A factory might have been open long enough to make car parts, but then transportation problems arose. Auto repair shops hoping to gain access to the auto parts they needed must have felt they were playing slap on the mole. As soon as one problem was fixed, another surfaced.

The law of supply and demand came into play. Those who had access could charge more for their parts because the demand was so great. While things are certainly better than this time last year, we’re still playing catch-up.

Higher car price

All of these supply chain disruptions have pushed up car prices across the board. This means that it has become more expensive to convert someone who has totaled their car into a new vehicle. Car dealers don’t need to bargain because there are more buyers than available inventory.

labor shortage

When a major event occurs — particularly one that kills more than 1 million Americans — people begin to reconsider their choices in life. What many discovered in the dark days of the pandemic was that they wanted something different. If they were able to return to work after restrictions were lifted, they did not want to return to the life they led before COVID-19.

News organizations dubbed it the “Great Resignation.” As unique as it seemed, it wasn’t the first time in history that millions of people decided to leave their old jobs behind. The Bureau of Labor Statistics (BLS) has reported the number of workers who have quit their jobs since December 2000. In 2021, almost 4 million people resigned every month. But in 2019, even before the pandemic, 3.5 million people were leaving their jobs every month.

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Employees are leaving to start their own business or pursue a new career path, leaving places like auto repair shops that are scrambling to fill vacancies. Hiring is more expensive than it used to be as mechanics and other personnel recognize their market value.

Hiring and training a new employee is expensive, and these costs have been passed on to the consumer.

More accidents

Something has happened since the country reopened. People seem to have changed their driving habits. Perhaps they are anxious to return to life as they once knew it, or perhaps it is the underlying fear of American politics. Whatever the reason, US road deaths hit a 20-year high in early 2022.

More accidents mean more damage. More claims mean bigger losses for insurance companies.

climate change

Climate change has increased the number of natural disasters. Between hurricanes, tornadoes, floods, wildfires, and severe winter storms, insurance companies have their hands full making payouts.

Any time a severe storm hits an area, you can expect damage to cars across the region. The cost of repairing this damage is passed on through higher insurance premiums.

How to lower your premiums

If you get a notification that your premiums are going up, you can take steps to lower them. For example:

  • Increase your deductible: The higher your deductible, the lower your premium.
  • Bundle Coverage: If you haven’t already, bundle your auto insurance with other coverages, like home insurance or renters insurance.
  • Focus on your credit score: The higher your credit rating, the lower your premiums. That’s because research has shown that people with bad credit tend to make more insurance claims. If your score isn’t quite where you want it right now, take steps to improve it.
  • Check all the discounts you may be missing: Take a fresh look at the discounts available from your insurer. There may be some that you still need to take advantage of.
  • Shopping spree: There’s no harm in contacting other auto insurance companies to see if you can snag a lower rate.

It’s possible that once things return to normal, prices will be pushed back down by competition. In the meantime, though, remember that there are steps you can take to keep your auto insurance premiums from breaking the bank.

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