Our son headed back to college this weekend – ending our ‘No Responsibility January’ – and starting his Spring Semester. Among other things, this means we need to call our insurance agent this morning and take the car insurance off the vehicle that he drives when he is home. Car insurance runs about $900 annually for the 2004 Acura TSX that he drives when he is home, so we save $75 every month that he is away at school. He is accident free and gets good grades – I hate to think how much higher they would be with a less responsible driver (or a more expensive vehicle).
If you haven’t noticed, car insurance rates have gone up dramatically over the last five years and are expected to continue to rise in 2018. Kiplinger’s reports that car insurance has inflated at a rate 3.5x faster than general inflation. Car insurance went up by +21.5% from 2012 to 2017. The sharp increase is a result of the added electronics and safety equipment on vehicles. I read recently read that almost 30% of the cost of a new vehicle is the electronics – up from just 5% twenty years ago.
Additionally, Kiplinger’s reports that comprehensive claims have gone up 25% in the last two years – even before cars damaged by Hurricane Harvey were added in. I had two of my own comprehensive claims in 2017: my SUV was hit by a softball at the ballfields we play it last April and about a month later a big rock kicked up from road construction and put a gash in the roof. Thankfully, they were covered as comprehensive claims and didn’t result in my premiums going up.
Every few years we sit down with our insurance guy and compare his rates with a competitor, we last did this in 2017 and found that we were getting a pretty good deal from State Farm. We spend over $3,000 a year in car insurance, so it is worth the time invested to see if we can get a better deal. Our deductible (at $500) is probably lower than we should keep it, but I don’t want it to be so high that I would second-guess getting my vehicle fixed after an incident. Additionally, when I looked at raising the deductible to $1000, it only saved us $300 a year across all of our cars. Just one incident a year – on any of our 4 cars – makes the lower deductible worth it to us.
Are you seeing your car insurance rates go up?
Image Credit: Pixabay