Over the past decade, auto insurance rates have increased steadily, well exceeding the rate of inflation over the same period. But what is driving the upward trend? Here are some factors that could be affecting drivers in Conway, AR.
1. Bodily Injury Loss Costs
In the five-year period from 2018 to 2022, auto severity has increased a substantial 40% even as frequency has declined. Causes include an increase in deadly accidents, rising verdicts in legal cases and medical cost inflation. In fact, the latter is expected to grow 7% in 2024,, up from 6% in 2023 and 5.5% in 2022. Check out this article about some of the highest verdicts in auto policy liability cases.
2. Attorney Involvement
With attorneys actively pursing auto accident business, more claimants now have legal representation. These claims see higher rates of expenditures for medical procedures and treatment. Review your policy with insurance agent to make sure you have the correct liability limits for you for expenses like these.
3. Distractions and Impairement
Distractions behind the wheel, from vehicle infotainment systems and mobile devices to driving under the influence, can lead to significant risks. Carriers consider these things in their rates, so if you would like a custom rate, talk to your agent about a telematics program.
4. Vehicle Repair and Replacement Costs
Autos have become more expensive to insure and repair. Newer vehicles are outfitted with advanced materials and technology designed to make driving more comfortable and safer. When these vehicles are involved in an accident, costs can be high, and labor shortages and inflation have only exacerbated the issue. In fact,, motor vehicle parts and equipment costs have increased almost 24% since September 2019. Meanwhile., used car prices are still up almost 47.9% in 2023 compared to the average from 2015 to 2019, despite recent softening. This directly impacts the cost of claims in the event of a total loss. Finally, rising auto thefts are further contributing to increased claim costs.
All the reasonings point to higher costs for auto insurance for drivers in Conway, AR. If you aren't sure you are getting the best price available, let us help you shop! Contact us today for help with your insurance rates.