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Auto Insurance Rates Increasing? You're Not Alone

You’re not imagining things—car insurance premiums are creeping upward.

Over the past five years, costs have increased industry-wide, and the trend is likely to continue through 2017. So what’s going on?

In short, driving a car in 2017 is very different than driving in 2012. Even if your ride hasn’t changed, the roads sure have.

Change #1. More cars and more time on the road

In 2012, gas prices hit an all-time high of $3.60 per gallon. (The national average these days hovers around $2.30.) Cheaper gas means motorists are less conservative with their car usage.

Unfortunately, this also means there are more opportunities for accidents, and therefore more money in premiums to insurance companies. Last year saw an estimated 8% increase in fatal car accidents over 2015, which was already up 7.2% from 2014.

Cellphone use is responsible for over 1 in 4 crashes.

Change #2. High-tech cars mean high-tech repairs

More driving also means more new cars on the road. And with a new car comes new, expensive-to-replace parts. Advanced safety features like backup cameras, computer-assisted parking, and adaptive cruise control are great, but they often require more sophisticated repairs when something goes wrong.

Change #3. The problem of distracted driving

Mobile devices have become more common, and that means more accidents. In one way or another, cellphone use is responsible for over 1 in 4 crashes. You might assume texting is the biggest culprit since it takes your eyes of the road and your hand off the wheel, but it only accounts for 5% of cellphone-related incidents.

The problem might be even worse than these numbers suggest, as drivers often don’t admit—and police reports often don’t mention—when cellphones are involved.

Change #4. Medical costs are rising

The general increase in health care costs can be felt in the auto insurance world, too. From 2005 to 2013, the number of bodily injury claims rose 32.1%. Unfortunately, as with the other factors above, much of the weight of that burden is carried by premiums.

With so many changes happening so quickly, it’s good to have someone who can guide you through the weeds. Our insurance agents can help you compare providers and find the protection you need at a price you can afford.

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