At McMichael Insurance, we closely monitor the insurance companies we represent, the coverage provided, and renewal rates.  As always, we are your independent agent, representing and protecting you.  Unfortunately the trends in auto insurance premiums have been on the rise since April 2016.
There are several contributing factors, including the high costs of claims, increasing costs of vehicle repairs, and unsafe driving habits. Based on what we see (and this is just our best guess), individuals and businesses are not likely to see rates level off any time soon.

Major factors are responsible for increase in personal & commercial auto insurance rates.

Technology. Computers, sonar-activated braking, and backup assistance systems all add to the cost of a new vehicle. You might wonder, “If the cars are so much safer, shouldn’t the insurance cost go down?” Well, when a “smart” bumper is damaged, the repair bill now includes computers, cameras, and sensors. For example, a 2015 Honda Civic had minor rear bumper damage with the cost of parts being $344.   Now, take a 2016 Honda Civic with the same minor rear bumper damage, and the cost triples to $1,034 for the cost of parts.

More Drivers on the Road. Thanks to low gasoline prices and rising employment rates, more Americans are now driving. As a result, there are more accidents, which lead to higher payouts. Higher payouts lead to higher premiums.

Distracted Driving. People not only drive more often now, but they also use their phones more while driving. The frequency and severity of auto accidents has increased nationally. Things such as texting, phone usage, Sirus XM, etc. cause a driver to be distracted, which leads to an increase in the number and size of claim payouts.

If you have any doubts about the prevalence of these factors, check out the other drivers next time you ride (not drive) in a car. We’ll bet at least 20% of the drivers you see will be using their phone in some form or fashion. Even an occasional user of GPS maps has to take his eyes off the road.

In a recent AAA Safety Study, drivers were asked, “In the past 30 days, how often have you sent a text message or email while driving?”   8.1% stated they sent a text/email fairly often, while 35% stated they had sent a text/email at least once in the last 30 days.

You can help reduce accidents by putting down your cell phone while in your car. There is hope that technologies being introduced into vehicles will help to curb distracted driving. But for now, the best practice is simply to leave your device alone while driving… no matter how hard it might be.