7 Reasons Car Insurance is Expensive Right Now

There are many personal elements that factor into your insurance rates – such as your driving and claims history, as well as the type of vehicle you drive, but there are other factors that are outside your control and affect all car owners.

Here is a list of the main reasons auto insurance is high as we begin 2023.

1. Pricey Technology
   • All the fancy safety features, such as lane assist, cameras, and sensors on your car help keep us safe, but repairing or replacing these parts due to an accident or insurance claim can be expensive. For example, instead of just replacing the glass for a windshield claim, auto body shops also have to adjust and calibrate sensors and possibly cameras. This increases the labor costs for this repair.
2. Vehicle Parts
   • Prices are up by more than 10% this year for car parts. Not only are they more expensive, but it is taking weeks and in some cases months to get the needed parts in stock. When an insurance company has to pay for a rental car for weeks and weeks instead of several days in many cases, that is extra cost for a claim.
3. Repair Costs
   • We have all heard of issues with the supply chain. While this is running smoother than in 2020, there are still issues. Labor costs have risen over 20% this year too, which makes repairs so much more expensive.
4. Vehicle Prices
   • Did you know that prices of used vehicles jumped more than 27% in 2021? New vehicle prices were up more than 14%. While those prices seem to be leveling out a little bit, we are still seeing high costs to acquire a new (or new to you) vehicle.
5. Inflation
   • The Consumer Price Index has risen several percentage points. That means we are all paying more for the same goods and services. You are feeling this in all aspects of your family budget.
6. Labor Shortages
   • A decline in available auto repair techs and mechanics is a challenge. Shops are having difficulty hiring new talent that has the skills needed for repairs.
7. Health Costs
   • With car accidents come injuries and that affects your insurance rates too. The high cost of health care is passed along to the insurance consumer too.

At Castle Insurance, we are here to help you understand your auto insurance and provide personalized discounts and other ways you can save.

https://www.bls.gov/

https://www.erieinsurance.com/

https://www.vehicleservicepros.com/home/company/21239992/ccc-intelligent-solutions

Sources: Bureau of Labor Statistics, CCC Crash Course 2022, Erie Insurance