Like many things right now, the cost of auto insurance is rising. For 2022, the average national cost to insure a car is expected to jump 5% to $1,707 annually, up from $1,663 in 2021, according to Insurify.
What’s driving this increase? Two main factors:
- The rise in inflation rates
- The rise in accidents mostly caused reckless driving behaviors
Although most people are driving less as most of us shifted to working from and traveling has gone down compared to pre-pandemic times, post pandemic accidents were 26% more fatal in 2021 than 2019! According to the National Highway Traffic Safety Administration, this rise in fatal accidents is most driven by over the speed limit driving. High speed accidents are always more catastrophic.
In addition, inflation trends and supply chain constraints continue to pressure rates, so insurance premiums rise. Car parts for damaged vehicles and replacement cars for totaled vehicles are leading to higher claims payouts. Since new vehicles are more expensive now than ever due to the supply chain constrains, it is important to make sure your have GAP coverage.
The payout for a totaled car is its value at the time of the accident. As the value of a vehicle drops tremendously after purchase, if you had an accident, you could find yourself in a situation where you owe more to the bank than the value of the vehicle if you are financing it. Since Gap insurance covers the difference between what you owe on your car loan and the value of your totaled or stolen car, this coverage has never been more important than now.
Make sure to contact us to review your insurance coverage and make sure you have GAP coverage if your vehicle qualifies for it. If you rates have gone up lately, make sure to contact us and we’ll be happy to shop our carriers for you.