Get Gephardt: What’s fueling the dramatic increases in auto insurance premiums?
Mar 7, 2024, 10:30 PM | Updated: Mar 8, 2024, 3:56 pm
Trisha Madsen bill showing how high her rates are despite having no accidents or claims on her driving record. (KSL TV)
(KSL TV)
ST. GEORGE — Trisha Madsen couldn’t believe her eyes when she opened the latest invoice from her car insurance company.
“They have doubled the premium on me.”
Instead of paying $696, they want $1,270. The kicker: Madsen has a perfect driving record. No accidents. No claims. So, why is there a spike in her rate? Madsen said her insurer told her costs are just up.
“To double them is quite a deal!” she said.
Madsen said she called other insurance carriers and they all want to charge as much or even more. So, she called to find the answer to: “What gives?
“That’s kinda why I’m reaching out,” she said. “I don’t want this to happen to a lot of people.”
It is happening to just about everyone.
“Rates are up all over the country, too,” said WalletHub editor Christie Matherne.
She explained this spike is largely a function of rates returning to normal. During the pandemic, hardly anyone was driving. It got to the point where insurance companies had such a surplus of money that they began mailing rebates to drivers. That’s all over now.
“The rates are returning to their former glory, so to speak,” Matherne said.
However, a return to normal isn’t the only explanation. Rates are also more expensive thanks to everything from cars being more expensive to repairs taking longer due to supply chain issues and increased demand for repair work as more people choose to hold onto their old cars instead of replacing them. The longer repair wait times mean insurance carriers are having to pay out more for rental cars after wrecks.
And Matherne said don’t discount Utah-specific hazards, such as cracked windshields.
“There are a lot of rocks in Utah,” Matherne said.
This is certainly not the news Madsen and others were hoping to hear.
“Being on a fixed income, it’s really hard to come up with an extra $1,200 a year,” Madsen said.
If you are looking to pay less, it’s maybe time to talk to your agent about discounts you may be missing.
Gephardt busts inflation: Auto insurance premiums are rising; here’s how you can still save money
And rethink making claims on some of the small stuff because insurance companies are already warning some customers that premiums could go even higher.
