Are Car Insurance Rates Falling? Should I Wait to Switch Insurance Carriers?
Reader question:
Are auto insurance rates falling in the U.S.?
Albert
They sure are.
It’s some of the best news to come out of the insurance business, and after so many years in which the rates have steadily gone up, they are finally beginning to go down. Not by too much, but in gradual amounts that are still reassuring and do make a difference. The very first drop in rates was by .3% nine years ago, and since then it has been growing. For this year, the expectation for reductions is somewhere around 3%. Again, it is going slow but the good thing is that it is going at all.
California has had some of the best results, with a 5.7% drop in insurance rates in the last year. This wasn’t the first year for rates in California to fall, but it was definitely the most successful. Other states where car insurance rates tend to be the highest, such as New Jersey, are also seeing good things happening. New Jersey alone will see a 15% decrease thanks to new state laws.
There are a lot of reasons that one might consider to be affecting the decrease of car insurance rates. One of the main ones is that there are now more people who are older than there are who are younger. The highest car insurance rates tend to belong to those under twenty five, and there are just fewer people of that age nowadays.
Another reasons is because cars are safer now. Every year a new kind of safety feature is added to the automobile market, and with things such as traction control, run flat tires, and all wheel drive, getting into a car accident these days seems like it takes a concentrated effort. Not only that, but car insurance companies provide incentives for people to buy safer cars with their discounts.
There are now more car insurance companies on the market as well, which means that the prices are going to fall due to there being more competition out there. Car insurance companies are falling all over themselves trying to come up with new discounts and innovative practices and advertising techniques to call customers. This mostly comes with companies that are now doing the bulk of their advertising through the internet, which is much cheaper and reaches customers just as well;if not better than traditional advertising schemes.
Another big factor has to do with more policing of drunk driving. Drunk driving laws are now much harder than they were before, creating larger disincentive. And the fewer drunk drivers, the lower car insurance prices.
Cheers,
Fashun Guadarrama.
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