The Deadly Reason Your Car Insurance Bill May Rise This Year
People are driving less during the pandemic and cars are safer than ever. Even so, America’s roads are deadlier than they have been in a decade.
Beyond the obvious concerns about life and death, experts say the rising death rate on US roads will lead to an increase car insurance rates for drivers.
According to the latest report from National Highway Safety Administrationaround 31,720 people died in car crashes in the first nine months of 2021.
This figure represents a 12% increase on the same period in 2020 – which also saw an abnormally high number of road deaths, despite falling traffic levels due to America’s widespread shift to lockdown and remote work.
The 12% increase in road deaths is the largest year-over-year increase ever recorded by the agency, and the projection of nearly 32,000 US road deaths is the highest of any the January-September period since 2006. By comparison, in the first nine months of 2011, there were just under 24,000 road deaths. In 2019, there were less than 27,000 deaths.
It’s not just about getting more drivers on the road. The road fatality rate – based on the number of fatalities per 100 million miles traveled in the United States – was generally around 1.10 to 1.15 before climbing to 1.35 in 2020 and 1.36 in 2021 .
Why car insurance prices are rising
It is difficult to fully explain why American roads have become more dangerous, although some research indicates that as roads became less congested during pandemic shutdowns, drivers were more likely to speed and operate under the influence of alcohol or drugs. Crashes caused by these drivers were disproportionately more severe than typical crashes.
What we know for sure is that the roads are more deadly, and therefore, car insurance companies are forced to pay more money in claims when accidents happen. And when that happens, it’s inevitable that insurers will pass on their higher costs and raise premiums for drivers across the board.
At the start of the pandemic, car insurance companies were give discounts to customers due to the perceived increase in safety due to fewer cars on the roads. Yet, as it became clear that the road fatality rate was on the rise, industry experts began saying last summer that a auto insurance rate increase came.
Indeed, some data shows that auto insurance rates have skyrocketed. According to To assurean online marketplace for insurance, the average annual cost of a car insurance policy in 2021 was $1,633, a 12% increase from 2020. Insurify forecasts a further 5% increase for 2022 , meaning the average policy would cost $1,707 this year.
“Inflation and rising levels of dangerous driving are contributing to this price spike,” Insurify explained in a statement emailed to Money. “It is certainly possible that if deaths continue to increase this year, the increase in premium costs could also increase.
On the other hand, The Zebra, an insurance comparison and shopping site, estimates that car insurance rates have increased at a slower rate – around 3% from 2020 to 2021. It expects higher prices in the future thanks to the increase in car accidents, road deaths and claims paid by insurers.
“More claims equals more losses, and more losses equals high rates for everyone, not just drivers involved in crashes,” Allie Byers, insurance expert for Zebrasaid in an email to Money.
Even as rates go up, drivers can take steps to save on car insuranceincluding classic strategies such as switching to a higher deductible and periodically searching for a cheaper policy.
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