Even as rates have started dropping, it is unlikely that drivers will see their premiums easing.
Though drivers might be inclined to believe that as inflation starts to fall, auto insurance rates aren’t likely to get any cheaper. In fact, premiums are expected to rise, and in some areas, they’ll be increasing by quite a bit.
The average cost of full coverage is $2,014 in the United States, which is 14 percent higher than last year.
According to the True Cost of Auto Insurance Report by Bankrate, the average cost of a full coverage policy in the US reached $2,014 per year. Naturally, the actual amount a person pays depends on a great deal, such as location and driving history. That said, it was an average of 14 percent higher than the average the year before, which helps to illustrate how much more people are paying for the same coverage.
Though high inflation has been cited as one of the primary reasons that premiums have been soaring, the fact that inflation is now starting to ease doesn’t necessarily mean that there will be any reductions in coverage rates. The reason is that the last couple of years have come with a number of other issues beyond high inflation, and those other issues have a lagging effect that are keeping the cost of car repairs and replacements high. Primarily, this means the parts shortages and labor shortages.
Labor and parts shortages are continuing to impact auto insurance costs and therefore its rates.
“Car insurance rates are reactionary,” said Bankrate insurance analyst Cate Deventer. That said, on a more positive note, she pointed out that, “If inflation keeps cooling we could see insurers file for rate decreases in future years.”
Therefore, while it isn’t likely that relief will be reflected in auto insurance premiums this year, it doesn’t mean that this won’t occur in coming years as inflation and other associated challenges continue to ease.
Still, aside from those factors, there are other issues that will determine how much someone is paying for their coverage. Fortunately, there are ways to help keep rates as low as possible – even at a time like now, when they are extraordinarily high. Drivers interested in saving money on their auto insurance premiums are typically advised to talk to their insurers about potentially available discounts. Moreover, shopping around can also be beneficial before renewal time.