United States law requires that you must maintain auto insurance if you want to legally drive in any state. As a result, the largest line of insurance written in the U.S. was found to be Personal Auto Insurance according to a study completed by the NAIC.
Just like everything else, insurance responds and adapts to fluctuations in our society and economy. Life at the beginning of 2023 looks a lot different than it did prior to 2020. Since 2020, we’ve experienced and overcome a variety of changes.
When the coronavirus pandemic hit, many of us began to work from home or stayed home altogether. This meant a lot less cars on the road and a lot less people utilizing their auto insurance policies. A number of auto insurance companies responded by offering premium refunds in an effort to provide some relief to their customers.
Although we saw a decrease in auto accidents during the pandemic, we also saw an increase in the price of motor vehicles due in part to an increased demand and a resulting shortage of semiconductors. According to Chapter 3 of a report published on whitehouse.gov, the “prices of used cars jumped by almost 40 percent” and we saw “nearly 12 percent higher” prices for new cars.
As pandemic restrictions eased, we began returning to the roads, meaning an increased likelihood for auto accidents. The demand for vehicle parts meant that it would cost more and take longer for your vehicle to be repaired. The higher value of motor vehicles and the cost to repair them translated to higher claims payouts. So, insurance companies are paying more for auto claims than they had pre-pandemic.
Here’s the good news: your independent agent is here to help!
The insurance companies that our agency works with have remained stable, so we’re seeing small increases, if any. But we’re keeping an eye out for our clients as we move into 2023. With access to multiple insurance companies, we shop for the best rate. We work hard to earn and keep the trust of our clients.