Policyholders facing higher insurance premiums due to inflation choosing to drive less, switch vehicle type or carrier
A recently released insurance trends report by Insurify looked at how inflation has impacted car insurance premiums by reviewing more than 40 million of their consumer quotes.
Insurify noted that weather patterns, crime rates, and population density contribute to regional variation in car insurance rates, according to the Insurance Information Institute, and state-level legislation does as well through varying driver attributes that insurers use to set rates and how much minimum coverage drivers are required to carry. Other factors that can affect insurance premium costs are car type, marital status, driving record, homeownership, age, gender, education, and credit score.
Michigan, Louisiana, and New York pay the highest premiums while Hawaii, North Carolina, and Wyoming pay the lowest, according to Insurify. They also found that city drivers also pay 15% more, on average, for auto insurance.
To curb increasing costs of car insurance, more than 1,200 Insurify survey respondents said they’re considering driving less (65%), purchasing an electric vehicle (EV) or hybrid (30%), switching insurance carriers (30%), moving closer to public transportation or walkable areas (16%), or dropping insurance (10%).
CCC Intelligent Solutions Vice President of Consulting and Services Bart Mazurek said during this year’s MSO Symposium in Las Vegas last week that traffic volumes are returning to pre-pandemic levels but less accidents are happening due to a decrease in traffic congestion caused mostly by remote work.
As for insurance, Insurify CEO Snejina Zacharia told Yahoo Finance, “While we saw the economy accelerate and demand rebound following the pandemic, Americans’ overall cost of living, including insurance, increased in 2022 due to built-up pandemic-related disruptions and increased inflation.”
A survey of 2,000 drivers in August by U.S. News & World Report, conducted in part to find out how inflation and the COVID-19 pandemic have affected consumers, found that 49% are driving