Car insurance premiums are up – a lot. Zebra compiles an annual report where they analyze car insurance prices across the nation. Automobiles today are much safer than in the past due to collision detection systems, lane assist, backup cameras and other pertinent safety features that are built into automobiles.
What Zebra found is shocking to many drivers: 63% of drivers are paying the highest rates in history.
When you look at your insurance policy, there’s a good chance that you’ve noticed that rates have gone up. And since 2011, the rates have risen by nearly 30%. Rates will vary depending on the types of car insurance coverage you have, but you can be sure that if your coverage is the same, your rates are higher.
The Depth of the Report
Zebra’s report is interesting since it is highly in-depth. What the report includes is a massive sample size of 73 million rates for drivers in 34,000 zip codes and that use 418 insurance companies.
The company’s director also states that it’s a mystery for most drivers as to why they pay less or more than someone else.
A lot of people are paying $500 a month for insurance, while others are paying $5,000. These are not just new drivers that are a high risk of getting into an accident either. Plenty of experienced drivers across the country, with no accidents on their records, have unjustifiably high car insurance rates in 2020.
The most expensive states for drivers are:
But Texas is an interesting case. Two years in a row, rates rose due to massive storms and hurricanes in the state. The storms and hurricanes caused damage to many vehicles, and insurance companies had to compensate vehicle owners for the damages.
The insurance rates in Texas have since fallen to start 2020, which is providing some relief for drivers that have had to routinely deal with rising rates.
What’s Causing Rates to Rise?
The report suggests that distracted driving is at least part to blame for the rate increases. Distracted driving’s primary culprit is smartphone usage. More and more people are on their phones when they drive.
An infraction in 2015 caused rates to rise by just $23, but today a person caught on their cell phone while driving will have their insurance rates increase $355.
If you don’t want to pay higher insurance rates, your best bet is to not use your phone while in your vehicle.
Remember how we discussed how technology is making the road safer? Car insurers realize that crash prevention does make the road safer, but this same technology is also very expensive to repair.
Insurers are using effective safety features as a justification to charge higher rates. Drivers with vehicles that have these safety features will:
- Receive fewer safety discounts
- Pay higher premiums if an accident occurs
Despite rising costs, there may be some hope that prices will go down in the future.
Legislators Ask for Lower Auto Insurance Rates
Louisiana’s legislators plan on tackling the issue of high insurance rates. Lawmakers realize that rates have swelled to a point where something needs to be done to protect drivers. Lawmakers will take the issue up during March’s meeting to determine how to have insurers lower rates.
The state has the second highest insurance rate in the country.
Interestingly, seven states have had their insurance rates fall since 2011, while 44 states have had their rates rise. Why? No one knows the justification for the rising rates.
Business Insider claims that 7.7 million Americans will see their insurance rates fall this year, while 5.6 million will have their rates rise. Insurance companies must alert state and federal agencies when they plan to increase their base pricing structure.
The publication found that the most drastic changes will impact:
- 1.5 million residents from Kentucky that can expect rates to fall 5%
- 1 million people in Louisiana and Kansas that will have rates drop 1.6% and 1.9%
While these changes are small, they will be a nice relief for drivers in these states. Major increases will occur in South Carolina, where nearly 1.2 million drivers will have their insurance rates increase. Rates are expected to rise by 6.7% on average, with Illinois and Indiana also expecting major rate increases in 2020.