Car insurance rates have risen over the last 10 years by 29.6% averaging $1,548 last year up from $1,194 in 2011.
Zebra, an insurance shopping site, published a detailed report, citing the increase outpaced both inflation and increases in average car prices. It also showed that increase in car insurance rates came even though the number of crashes fell year after year.
Of, course unhappy car owners have their own ideas as to the increase, pointing to the rise in vehicle thefts, and the destruction of vehicles by extreme weather such as the million cars destroyed by hurricane Harvey in the Houston area in 2017. They also point to increasing urbanization and a strong economy putting more drivers behind the wheel, many of whom are distracted by smartphones.
But, a reason for the increase in insurance rates falls more to the cars themselves.
In the ‘old days’ when you got a dent in your bumper or fender you just got it fixed with a few hammer blows or if your windshield got a crack in it, you just replaced it with a new simple glass windshield. But today, the sensor features that keep your car where it should be while on the road are much more expensive to fix when you do get into an accident.
Now you have to replace radar, ultrasonic sensors, or cameras which all need to also be calibrated in order to work properly. For instance, you can’t just replace a cracked windshield on a new car, you have to have someone readjust any cameras that look through the glass and that costs a whole lot extra.
In other words, technology is playing a huge role in the pricing of car insurance rates and according to Zebra’s communication chief, Nicole Beck, it isn’t making it cheaper for car owners.
All of the safety sensor and camera features are new and there just hasn’t been enough evidence to make actuaries confident that these benefits outweigh all the extra costs it takes when it comes to repair them.
Also, active safety sensory systems aren’t the only things driving up the cost of insurance, but other things such as going from traditional halogen headlights to the new high-intensity discharge headlamp can now increase your repair bill to $1,800 per headlamp according to the Insurance Institute for Highway Safety data for 2018.
Hopefully, good news is that rates will go down as more data accumulates showing the benefits of driver assistance technology.