Auto Insurance Rises By Nearly 26 Percent Nationwide

For all of those who have been following the Federal Reserve’s decisions on when and if to cut interest rates, one of the major factors in this decision was the inflation gague determined by the Consumer Price Index (CPI). The recent release of higher then expected numbers has cast serious doubt as to the timing of any interest rate cuts.

Auto Insurance Continues to Skyrocket

A recent report by Bankrate showed that in the past year, U.S. auto insurance rates have risen by nearly 26%. This increase alone contributed a half a percentage point to the recent CPI.

The causes of this rise are several fold, including increases in repair costs and natural disasters. However, driver behavior continues to be one of the leading causes of insurance rate increases.

Risky Driver Behavior

The National High Traffic Safety Association (NHTSA) reported that there were 7,000 more traffic deaths in 2022 as compared to prior years. This has led to an increase in high level claims with insurance, resulting in a 27 percent loss for these companies.

Much of this rate increase was attributed to a rise in risky driver behavior, such as speeding, texting while driving or drowsy driving. It was also found the the rate of operators driving under the influence of alcohol or cannabis also increased.

Any driving behavior that an insurance company can deem to be “risky” can have drastic effects on one’s insurance rate. In certain circumstances, the degree and number of risky acts can cause an insurance company to decline to continue coverage for a driver who insurance executives have deemed to be too high a risk. This reality places an increased importance on taking the necessary steps to mitigate or eliminate this risk, through the Vermont Judicial Bureau process.