Insurance costs keep climbing, here's why and who's hurting
For those drivers worried about paying the exorbitant increases in automobile insurance premiums, reading a recent Washington Post story won’t help to lower the prices. But it may be something of a comfort to realize that lots of people are paying as much — or more — than you are.
The Post’s detailed report, titled “Drivers squeezed as auto insurance costs soar across the US,” is packed with facts and figures showing that rising rates are affecting hundreds of thousands of American drivers, with some states seeing increases above 50 percent in the past year.
“Premiums have kept climbing even as other types of inflation have cooled,” reads the piece. “According to the Bureau of Labor Statistics, car insurance for U.S. drivers in July was 16 percent more expensive than in July 2022, and 70 percent more expensive than in 2013.”
The reasons are familiar, and one needn’t be a car enthusiast to process them. Quoting the Post, “Car repair costs, body shop wages and used car prices have all had significant increases,” said Frank Palmer, chief insurance officer at Root Insurance. “The entire industry has had to raise rates to keep up with these trends.” Massive insurance payouts attributed to natural disasters—hurricanes, floods and other “catastrophic losses—also figure into the higher rates.
The Post also found that things are worse for lower income drivers, and not just because of their reduced income to begin with. Doug Heller, director of insurance at the Consumer Federation of America told the Post: “If you have a blue-collar job, or if you only have a high school degree, a number of companies will charge you more than if you’re a white-collar professional. Everybody’s facing rate hikes, but a greater share is borne by lower-income drivers.”
One scary element in the story, even for those drivers who have no issues with escalating insurance costs, are the indications that some drivers can’t or won’t pay for insurance. Or they’re downgrading to “liability-only” policies that fulfill legal requirements but otherwise offer little coverage. The Post cited a 2023 Policy Genius survey that found 17% of surveyed drivers aged 17 to 34 were driving uninsured.
“There’s one thing worse than rising rate hikes,” Georgia Deputy Insurance Commissioner Steve Manders told the Post. “And that’s not having coverage at all.”
Read the full Post story here.
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