Frustration during the pandemic was reflected in how people drive: During the past year, the number of car accidents rose, and traffic deaths were up 8% from the previous year. As a result, car insurance rates are skyrocketing. Really, this is only natural. Denny Jacob for Property Casualty 360 wrote, “More accidents mean more claims — And those claims are expected to be more expensive for insurers to pay because repair costs are rising.” So, how will these rates affect us? And why did we get into more accidents in the first place?
The reasons why
At the beginning of the pandemic, there was a decrease in car accidents as traffic volume decreased. So, what happened? As a result of roads being empty, risk behavior increased. People saw the empty streets as an opportunity to drive faster and therefore more carelessly, which is never a good idea. People were speeding, motorcyclists were driving without helmets, and a decrease in law enforcement made many of these infractions go unnoticed. Car insurance rates increased stress might have led to drivers being more impulsive on the road; this coupled with more free time and increased consumption of alcohol and drugs all contributed to the rise in accidents and fatalities. Overall, car insurance rates are going up and are predicted to continue this trend.
Can people afford it?
What impact will this rise in insurance rates have on people with tight budgets? More than 75% of Millennials own cars, and that number is set to rise. CSAA, State Farm and Geico are the top care insurance sellers for young people. And although not all companies have increased their rates, many have bumped up rates around 10% in 2021 alone. Among student loan payments, health insurance and rent/mortgages, can young people afford another increase? Will rates decrease once transit returns to normal? These are questions only time can answer.
