As 2017 draws to a close, let’s reflect on some insurance-related items in the industry. While storms and hurricanes certainly dominated the headlines for a while, one issue that has been consistent throughout the year is an increase in auto insurance rates. If you’ve seen a rate increase this year and have wondered why (especially if you have a clean driving record), this blog post is for you.

Why are rates going up? There are three primary reasons.

1. Distracted Driving: The National Highway Traffic Safety Administration ( reports that 71% of young drivers have admitted to texting and driving. At 55 miles per hour, the average text message takes your eyes off the road long enough to cover a football field. Do the math and tell me that’s not a serious problem. In fact, the statistics are already telling us it’s a problem. For example, in 2015 more driving-related deaths occurred in any year since 1966. Worse yet, we’re on pace for a two-year increase of 18%.

2. Technology in Vehicles: A couple of our insurance companies have specifically cited this as a large factor in increased claim payments. The rear of cars used to be tail lights and a bumper. Now they have backup sensors, cameras, kick-activated tailgate sensors, etc. In 2005, a Ford side mirror cost $845. In 2015, it cost $1,349. Again, think about the turn signals that are now inside mirrors along with blind spot warning lights and mirror defrosters. That’s a lot more technology in the same amount of space.

3. Healthcare Costs: I’m sure you’ll agree that medical costs are significantly higher than they’ve ever been. Therefore, an accident that has a bodily injury component to it has a much higher overall claim cost than it did just a few years ago. I think you’ll also agree that auto insurance rate increases haven’t been close to how much health insurance rates have gone up recently. Again, you can do the math on that and can see where the auto insurance industry might be falling a tad short.

While I certainly understand the frustration that occurs with auto insurance rate increases, I’m not necessarily advocating shopping your insurance around because you’ll lose out on any loyalty discounts you’ve accumulated with your current insurance company. Plus, if you’ve been claims-free with your present company for a while, they might be more lenient on you should you have an accident in the future. Your best bet is to speak with your independent insurance agent and learn what he or she has to say about your current auto insurance program.

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