CINCINNATI — Car insurance is getting more expensive. A new Bankrate report found the average cost of full coverage car insurance went up 26% from last year.
“It's crazy the amount of increases that every company is taking,” said Tori Sabo, an independent insurance agent with Meridian Insurance in Covington.
Michael Barry, chief communications officer with the Insurance Information Institute, said insurance companies have been paying out more money in claims and claims expenses than they’ve been bringing in from customers.
“There's a couple of reasons,” he said. “The main one has to do with inflation. Inflation impacted, for auto insurers, replacement costs for vehicle parts. It rose the rate that insurers pay for bodily injury. Insurers also have to deal with auto body repair shops and labor rates have gone up there as well.”
Barry said some cars have also become more expensive to repair due to advancements in technology.
“Years ago, you'd have a rear-end collision and it might be $1,000,” he said. “Now that same collision might result in the broken rearview camera. Now all of a sudden, it’s a couple thousand dollars.”
Bankrate found the average American spends $2,543 on their average annual premium. The cost was slightly higher in Kentucky at $2,549, and significantly lower in Ohio at $1,514.
WCPO asked Barry how much location plays into a customer’s rate.
“I think what the auto insurers looking at is 'Where does the car live?’” he said. “It's going to dictate the likelihood of you getting into an accident, the likelihood that there's going to be a theft or vandalism event and also natural disasters.”
To cut costs, Barry recommends considering a higher deductible, if you’re in a position to do so.
“You're probably not going to file a claim unless it's over $1,000,” he said. “So take $1,000 deductible as opposed to $500.”
Barry said there are also usually discounts that customers are leaving on the table, such as for taking a defensive driving course or getting good grades (for teenage drivers).
Working from home can have an advantage too.
“If for instance, you're now working remotely rather than driving, make sure your insurer knows about it,” Barry said. “Most insurers are working in the assumption that you're going about 12,000 miles a year.”
Sabo recommends customers shop around.
“There are some times that are $50 to $100 (higher), and then I'll re-shop them and get them back down to pretty much what they were before with a different company,” she said.
She urges drivers to avoid a lapse in coverage, which can make costs go up.
“It shoots their price right back up, even higher,” said Sabo.
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