Auto Accidents Leading to Higher Insurance Premiums
By Zac Pingle, Staff Writer
Within the past few years, employment has been rising and gas prices have been dropping. This has led to far more cars on the road, and has unfortunately led to more accidents. In order to compensate for the costs on insurance claims, insurance companies have been increasing premiums.
James Lynch, the actuary of the Insurance Information Institute (III), stated “The number of accidents has gone up. At the same time, the size of claims settlements has been rising as well, so the industry is kind of getting hit by a double whammy.”
The size of the increase in insurance rates is staggering. Typically, there is an auto insurance inflation of about one percent. However, data released by the Bureau of Labor Statistics shows an inflation rate of six percent between July of 2015 and July of 2016. This also means that you should expect to see a higher premium - possibly a substantial increase in your auto insurance rate - when you renew your insurance, even if you have a good driving record.
There are many factors that affect insurance rates such as increased costs of car parts and medical care. Although, the biggest problem that insurance companies face is the number of car accidents. The latest report that shows the rates of car crashes was released in 2014 by the Insurance Institute for Highway Safety (IIHS), reporting nearly 30,000 car crash-related deaths that year.
One major factor that has contributed to the increase in car crashes is distracted driving. According to the National Highway Traffic Safety Administration (NHTSA) the two major factors that contribute to car crashes are distracted driving, and drowsy driving. One report by the NHTSA shows that drowsy driving contributes to a car crash 23 percent of the time, while another study reports that distracted driving was involved in 10 percent of all fatal crashes in 2013.
Some techniques may help you to keep your insurance payments down, such as comparing your insurance policy price to other companies or by choosing to accept a high deductible to avoid a higher premium. Although, the best way to reduce the insurance rates as a whole is to drive safely.