Will Auto Insurance Rates Increase in 2023?

Costs are rising in just about every industry right now—including auto insurance. With the end of pandemic-era premium decreases and reimbursements, millions of Americans may be in for sticker shock when they receive their 2023 statements.

What’s Causing Insurance Policy Rate Increases?

In its 2022 report on auto insurance trends, Insurify (an insurance comparison shopping website) found that the nationwide average cost of auto insurance increased by 9%; in 2023, Insurify predicts the average rate will increase an additional 7% based on the state of the industry and historical trends. So why are costs rising? Here are some of the main reasons for the predicted increases:

  • Americans are driving more now, which results in more accidents.
  • The cost of auto repairs is rising, which makes collision repair more expensive.
  • Inflation has contributed to cost increases in all goods and services.
  • Climate change increases the chances of vehicles being damaged by natural disasters like wildfires and hurricanes.

Several states saw significant increases of more than 25% in auto insurance rates in 2022, including Maryland, Oregon, and Virginia. Although Michigan’s insurance rates stayed stagnant, the state continues to have the highest rates in the nation. California’s rates have actually dropped by about 15% on average, which is due (in part) to the pandemic-related rate increase restrictions put in place by the CA Department of Insurance.

How Can Drivers Save Money On Auto Insurance?

Insurify polled more than 1,800 drivers in July and November on how they were planning to save money on automotive expenses, including fuel, maintenance, and insurance; here’s what they found:

  • Due to decreases in gas costs, drivers were half as likely to consider purchasing a hybrid or all-electric vehicle in November as they were in July.
  • 35% of those polled were concerned about potential policy rate increases at the end of the year and were considering switching insurance providers.
  • 50% said they planned to drive less.
  • 47% had at least one increase in their insurance policy in 2022.
  • 19% had their insurance rate increased multiple times in 2022.

Dan Roccato, clinical professor of finance at the University of San Diego School of Business says future rate increases are largely dependent on the strength of the economy. “A recession, along with a weaker labor market, will take the pressure off rate increases. An economic slowdown means lower inflation. This should allow insurers to rein in costs and pass savings on to drivers,” he said.

According to financial author and podcaster Laura D. Adams, it’s a good idea for policyholders to shop around and do price comparisons on insurance quotes annually. Of the policyholders who changed providers in 2022, 92% reported that they saved money, with 26% reporting savings of $200 or more a year. She also recommends taking advantage of multiple vehicles, multi-line, and good student discounts. Bundling your car, home, and other insurance policies can also help cut costs.

Solera Vice President of Industry Relations and Vehicle Claims Bill Bower recommends considering adjustments to your deductible or co-pay—but keep in mind that this also means you take on more risk. User-based insurance is also an option. If you’re a good driver and are willing to allow the insurance company to track your driving behavior, you may be able to have your provider change the way your policy is rated. According to the Insurance Research Council, approximately 63% of drivers see drops in their policy rates after enrolling in the user-based program.

Taking steps to improve your credit score can also help; drivers with poor credit scores pay nearly 80% more for car insurance.

Some Insurance Providers Are Slow to Settle Claims

If you end up needing collision repair, it’s also important to keep in mind that some insurance providers are slow to settle claims—which, in some cases, could delay your repairs by months. This has caused some shops to stop accepting repairs that are covered by certain insurers.

Jim Collins, the owner of an auto body shop in Cincinnati said about Allstate, “In my 53 years in the industry, the body shop business, I have never seen anything like this. We’ve got vehicles that have been here for six months… The thing is when you have to deal, making 20-to-30 phone calls on one claim, then they have three, four, five different people contacting you over that claim, it [gets] frustrating, and it’s overwhelming. So, we are just not going to deal with the company.”

The Bottom Line

Between rising insurance rates and lengthy claim processing times, getting your vehicle repaired after an accident these days can come with unexpected costs and frustrations. At Cline Collision Center, we aim to be as transparent and helpful as possible. If you need a repair, we recommend contacting us first to determine whether we work with your provider, how long their typical claim process takes these days, and how long it will take to get the parts needed for your repairs. That way, there aren’t any surprises!

To schedule a repair or receive a free estimate, contact us today at (707) 591-9909.

Why We Like to Work with AAA Insurance On Collision Repair

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At Cline Collision Center, we like to make things as easy as possible for our clients. After an accident, the last thing you need is more stress when handling your repairs! That’s why we offer easy estimate appointments, complete insurance coordination, and a repair status tool on our website. We’ll also help you determine if you might qualify for a free rental car, even if you don’t have rental car coverage in your policy. Beyond providing top-quality OEM repairs, we want the entire experience to be hassle-free.

AAA Insurance Aligns with Our Commitment to Hassle-Free Repairs

This is also why we enjoy working with AAA insurance when coordinating repairs. They have an easy claims process compared to other insurance companies, and they usually don’t question our expertise when discussing what’s needed for repairs. In short, they tend to do what they can to make your collision repair as simple as possible.

Beyond the standard auto insurance coverage, they also have some additional coverage options and benefits that can be very helpful, like:

  • Gap insurance to cover the difference in cost between a car’s replacement cost and the amount remaining on your lease or loan.
  • Rental car reimbursement, which covers the cost of a rental car while your vehicle is being repaired.
  • Rental car coverage, which covers you if you get into an accident in a rental car.
  • Nonowner’s insurance, which provides liability coverage for those who drive other people’s cars but don’t have their own.
  • Pet coverage, which pays for the cost of a pet’s medical care if they’re injured in an accident.
  • Accident forgiveness, which keeps an accident from increasing your premium if you have a history of being an otherwise safe driver.

All Insurance is Welcome

Despite the ease of working with AAA, we’re happy to work with all insurance companies to help you get the repairs you need! However, if you’re shopping around for a new provider, we can say that we’ve had a great experience with AAA.

Regardless of which insurance provider you have, it’s always a good idea to take a look at your policy from time to time to make sure you have the right coverage. After all, your needs can change, so it’s always best to be prepared with the right coverage for your driving habits and lifestyle.

For more information on our insurance coordination services or to schedule an appointment, contact Cline Collision Center today at (707) 591-9909 or request an appointment online.