I have news for you…it’s not just your insurance premiums that are going up, everybody’s insurance premiums are going up. Here’s why:
- Auto sales are up. More people are buying cars. That’s a good thing right? Wrong. More cars on the road equates to more risk for the insurance companies. Why you ask? More cars on the road = higher chance of accidents = increasing number of claims. Thus, the higher the risk, the higher the premium.
- Gas prices are low. New Jersey is known for having the cheapest gas in the country which makes its residents very happy. Well unfortunately, you can’t have your cake and eat it too. Cheaper gas means that people can travel longer for less which means more people on the road = higher chance of accident. Get my drift?
- When older cars get into a crash, the insurance companies take the heat. Meaning, consumers typically have liability only on vehicles that are 10 years or older and have low premiums. So, if they are out driving these vehicles and crash them, the insurance company is left picking up the pieces.
- Healthcare costs and vehicle-repair costs are on the rise, increasing the size of the payouts insurers are making.
So the key takeaways from this is even though your insurance premium may be going up, you are not alone. Everybody’s rates are going up for the reasons mentioned. No need to be concerned or alarmed if you see an increase in your rate, because this is a common trend right now in this industry.
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