Increased Repair costs
The state requires drivers to carry minimum property damage liability coverage. This is the maximum amount the insurance company will pay out for damage to vehicles and other property as a result of an accident. The growing cost of labor is a major contributor to overall increases in repair costs. For example, vehicle repair costs rose 2.7% in 2016. The largest repair cost comes from replacing expensive technology in newer vehicles such as bumpers with sensors.
Insurance Fraud
The Insurance Information Institute estimates that insurance fraud costs $32 billion a year. A common form of insurance fraud is for someone to fake injuries caused by an accident. Insurance companies pay out claims for injuries that never occurred, and people with bogus injuries are cashing in. The Insurance Information Institute estimates that false information on applications costs insurers $16 billion a year. It’s the good drivers who take a hit on their rates when this happens.
Uninsured Motorists
Uninsured motorist covers you in the event you’re involved in an accident with an uninsured driver. It’s estimated that 12% of drivers are driving without car insurance.
The total cost of uninsured claims and the legal process it takes companies to secure settlements is huge. The Insurance Research Council estimates that uninsured claim payments are up 75% over the last 10 years and translated to a $14 increase per insured individual.
Medical Costs
The state has a minimum, required level of bodily injury liability coverage. This is the maximum amount the insurance company will pay for medical costs in the event of a car accident. Increasing medical costs affect your premium even if you have not had a claim.
