HOUSTON - Many drivers are getting hit with higher auto insurance rates. But not only is inflation driving up the cost of insurance, it may also mean you’re underinsured.
Drivers are feeling it.
"My car insurance, my house insurance, my health insurance, all of it has gone up," said driver Carolyn Wagner.
"We have changed insurance companies probably three times," said drivers Patrick and Lisa Bennett. "Yah, four years and no accidents, so we’re like why is it so high?"
Bankrate reports auto insurance rates are up an average of 8%.
"The cost of medical care in the aftermath of the claim, the cost of vehicle parts and equipment, labor and all of that is increasing," explained Cate Deventer, Bankrate analyst.
Not only are insurance rates higher, Deventer says high inflation may mean some drivers are underinsured. Here's why.
The Consumer Price Index reports medical care increased 5.1% over the last year. That means 5% higher costs that your bodily injury liability, personal injury protection, and uninsured and underinsured motorist coverage may have to cover in an accident.
"The main group of people this is affecting are those that have state minimum coverage. So in 2020, the Insurance Information Institute said the average bodily injury claim, the damage you cause to others, was about $20,000, and that’s two years ago now," said Deventer.
Plus, prices for new cars shot up 10% over last year, and used cars rose 6%. Parts and labor shortages have increased repair costs.
Deventer says some drivers may want to take their property damage liability, comprehensive coverage, and uninsured motorist property coverage to the next level.
"It is not going to increase that cost much to increase the liability limit. We found that going from state minimum coverage to what’s considered the next level of liability coverage is generally $7 a month," said Deventer.
Seven dollars, she says, that could help protect your wallet from a serious wreck.
Here are some tips to save money on auto insurance:
- Shop around by getting quotes from other carriers
- Increase your deductibles
- Ask for discounts, such as safe driver and paperless billing discounts
- And use telematics, which allows your insurer to track your driving through an app or device in your vehicle, which can result in a discount for safe driving