Nobody wants to hear that the price of anything is going up, much less when it’s a necessity like car insurance. Unfortunately, that’s the case as experts predict the price of car insurance to take a hike in 2018. Although there’s not much you can do about it, other than shop around for a better deal, it’s still interesting to find out why the increase. Here are some of the reasons that your car insurance may be going up.
The price of gas is supposed to be going down. Some may see that as a welcome blessing, but it can be a double-edged sword. According to insurance companies, lower gas prices equates to more driving and therefore more possibility of traffic accidents.
A more obvious reason is the increasing number of distracted drivers which is becoming a major issue across the country. As more drivers are using hand held devices while driving, the number of insurance claims is skyrocketing. Even using hands free features aren’t the answer as some say that using voice commands still causes distraction.
The bottom line is, regardless of the contributing reasons for the insurance companies to speculate higher claim amounts, claim rates are in fact going up, and the amounts being paid out are becoming greater. While the long-term trend is showing a drop in the number of accidents, the average payouts on those accidents is rising. Claims for bodily injury have been going down as much as 14.5 percent while the average cost per payout rose 32 percent to more than $15,500.
High payouts are likely to continue as the price to repair new cars with all their technology increases and the cost of medical care increases. All is not lost however, every year there are more safety features added to new cars, and the laws are getting tougher on distracted drivers.