If you’re a car owner, you must stay up to date on the latest changes in the car insurance world. Read on as we outline the state of car insurance 2022 and give you some tips on how to best approach the changes.
How Does 2022 Look for Car Insurance Buyers?
In 2022, auto insurance premiums will rise owing to hazardous driving and expensive claims. Also, the impact of inflation and supply chain disruptions means shopping for a reasonable rate is more vital than ever. The good news is that the cost of auto insurance for electric vehicles will go down. Experts believe usage-based insurance might help good drivers save money. Here are the trends that auto insurance purchasers should look for in 2022.
1. Hazardous Driving Leading to Rising Car Insurance Rates
A steep rise in speeding infractions and deadly crashes during the pandemic and rising claims costs will mean higher car insurance premiums in 2022. According to a recent study, driving at speeds of more than 80 miles per hour on trips is around 10% greater than pre-pandemic levels. The information also shows that approximately one out of every 20 miles traveled is at more than 80 mph speed. According to the National Highway Traffic Safety Administration (NHTSA), there was an 18.4 percent rise in deadly accidents during the first six months of 2021 compared with the same period last year—the highest percentage rise ever in NHTSA history.
Automobile accidents are much more severe at high speeds, resulting in larger insurance claim payouts. Claims usually raise drivers’ rates. Car insurance companies then pass their extra costs on to customers in the form of higher premiums—even if they made no claims.
2. Inflation Also a Factor in Car Insurance Rates Increasing
Inflation has a significant impact on auto insurance premiums. Experts say car insurance rates could rise due to inflation trends and supply chain restrictions. According to research by CCC Intelligent Solutions, the cost of automobile components rose by 6% in 2021, the greatest increase since 1997. Also, drivers seeking cheap auto insurance may be more inclined to shop for a lower rate. Rates go for six to 12 months. So if rate hikes occur during that time, yours will stay as is until the end of your coverage term.
3. Insurance Rates for Electric Vehicles Set to Come Down
Because higher equipment and labor costs make them more expensive to repair, electric vehicles or EVs have been more costly to insure than other types of cars. But industry observers state that change may be on the horizon. This is because of the presence of more electric vehicles on the market. With this, the cost of repairing EVs may dwindle once more of them hit the road. While this is a welcome development, there is still much to learn about how to make and design green cars.
4. Usage-based Insurance: Good Drivers Could Save Money
Automakers and insurance companies are looking to help drivers who’d like cheap car insurance by offering usage-based models that allow good drivers to get a more affordable rate.
The usage of telematics and usage-based insurance (UBI) promises to focus more on driving variables, which is a step in the right direction. The use of telematics technology, which involves a plug-in gadget or a mobile phone app, allows you to keep track of your driving behavior and habits. If your driving score is high enough, you should be able to get rates that are far lower than those offered by standard auto insurance.
According to reports, over 60% of auto insurance firms in the United States provide UBI plans. They believe that more insurers will be implementing usage-based insurance schemes. This tactic can attract new clients and keep the ones they have. Opportunities for customers to enjoy their safe driving and lower mileage trends will expand as insurers continue to develop and tailor usage-based coverages.
Equip Yourself with the Proper Information Before Buying Car Insurance in 2022
As 2022 unfurls, you must start preparing for the changes that will affect the car insurance industry. Take note of these things to ensure that you get a car insurance rate that is fair and proportional to your needs.