Ask Fitz: Auto Insurance Trends Influencing Premium

When is the last time you reviewed your auto insurance premium? If not recently, then you may want to do so in the near future, as auto insurance rates can fluctuate often due to several aspects considered by insurance carriers. Below is a list of three main factors that can lead to a possible increase in the cost of auto insurance.

  • Distracted Driving

Distractions while driving are not new; however, the number of accidents caused by distracted drivers is rising. This change is due to two factors: First, the prevalence of smart phones and second, the increase in high tech features associated with newer cars. The National Safety Council reports that cell phone use while driving leads to 1.6 million crashes each year. Nearly 390,000 injuries occur each year from accidents caused by texting while driving. Most drivers have access to their smart phone and therefore have a constant temptation present. In addition, the advanced technology features in autos lead to the potential for distractions. GPS navigation systems, Bluetooth audio systems and DVD players are a few examples of features available in cars that require the attention of drivers. The NHTSA says that “on average, drivers take their eyes off the road for five seconds at a time while texting, traveling at 55 miles per hour, that’s the equivalent of driving the length of a football field … blindfolded. Couple that with taking at least one hand off the wheel and diverting attention away from the road and you have a recipe for disaster.” Therefore, you can see why distracted driving increases auto claims for insurers and ultimately leads to increased premiums.

  • Cost of Repairs

Another factor influencing the upward pressure on auto insurance premiums is the increased cost of auto repairs. The advanced features on newer vehicles also lead to increases in the cost to complete repairs, even on minor accidents. For example, as of May 2018, all new vehicles were required to have rearview video systems (backup cameras) in accordance with NHTSA regulations. This technology should reduce accidents; however, it has also made common and previously inexpensive repairs more expensive, increasing the potential losses for insurance companies.

FITZ TIP: The most common problem that owners experience with backup cameras is poor image quality. Since many cameras are mounted low on the back of the car, they’re subject to being obscured by mud, snow, dirt or other debris. Luckily, the fix is easy: Clean the camera lens with a soft cloth (to prevent scratching the lens).

  • Global Auto Demand

A strong economy leads to an increase in insurance premiums due to the rising number of cars on the road. More people can afford to own a vehicle. Auto owners also tend to drive more miles in a healthy economy since they can afford the gas and maintenance required to operate a vehicle on a more frequent basis. These factors naturally lead to an increase in the number of auto claims, which then leads to an increase in premiums for drivers.

While auto insurance premium rates are constantly changing, we have good news! This is a great opportunity to review your insurance premium and even consider alternate quotes to make sure your premium is as competitive as possible. Insurers look at a laundry list of items in order to determine your premium, and we can help you understand and these factors to achieve the best possible premium for you. As a Trusted Choice Independent Agency, the Baldwinsville-based Huntington Agency is your local insurance agency here to make insurance less intimidating for everyone in our community!

Everyone needs insurance! Just Ask Fitz!

John FitzGibbons

Huntington Agency

6 Southgate Road

Baldwinsville, NY 13027