With the current state of the economy, consumers have noticed an increase in the cost of goods and services throughout the last year. This cost increase has unfortunately trickled over into the transportation insurance industry. In fact, we have seen an increase in the cost of auto insurance rates by nearly 8% across the country. In this blog, we will discuss some of the factors affecting auto rates and what you can do to save.
Factors Affecting Auto Rates
There are a number of underlying factors that play a role in calculating your auto insurance rates. Your age, driving history, vehicle type, and coverage choice all impact your premium. However, this is only true for individual auto rates. There is a broad range of factors that affect average auto insurance rates nationally. Here are some of the reasons we’ve seen a rise in auto rates:
- National inflation: Perhaps the biggest driver of increased auto rates in 2022 is inflation. The Consumer Price Index (CPI) rose 9.1% between June 2021 and June 2022. This has not only affected commercial auto rates but also all goods and services across the board.
- Labor shortage & supply chain disruptions: The U.S. is still recovering from labor shortages and supply chain disruptions caused by the COVID-19 pandemic. With fewer people working, pay rates often increase, resulting in increased auto rates. Also, car parts are less available and more expensive which also influences costs.
- Increase in claims: Another impactful factor is the number of claims received by insurers. An increase in claims can be linked to more drivers on the road after the pandemic and an increase in driver distractions caused by cell phones.
How to Save on Commercial Auto Insurance
Dealing with rising auto rates sounds like another headache to manage, but having the right knowledge can help you prepare and ultimately drive down costs.
The first thing you should consider is to review your current policy. Reviewing your existing policy and understanding your coverage types, limits, discounts, and premiums can help you find some wiggle room to potentially save money. If you aren’t sure how to properly review your policy, our team at TIB can help.
Another effective way to reduce auto insurance costs is by increasing your deductible. The deductible is the amount of money you are able and willing to pay out of pocket for an accident before claiming insurance coverage. Opting for a higher deductible will result in lower insurance rates, but it’s essential that you drive safely and avoid an accident at all costs.
Bundling your commercial auto insurance with other policies has also proven to reduce costs. It’s important to keep in mind that if you have a clean driving history and have never filed a claim, you can also ask about no-claims bonuses which can help maximize your insurance savings.
Start Saving Today with TIB Insurance
Commercial auto rates are increasing and they don’t seem to be going down any time soon. That’s why you need an insurance partner with vast experience in the field. At TIB Insurance, we are dedicated to the transportation industry. We understand the ins and outs of commercial auto insurance and can utilize our knowledge to help you find the best coverage for the lowest rate. For more information on how you can start saving today, please contact us to set up a call.