As Car-Insurance Rates Rise, Fed Up Drivers Shift Gears
Digest
The average annual cost of car insurance in the U.S. has risen 12% in the past year and is expected to rise another 9% next year. This surge is attributed to increased car repair costs, more accidents due to distracted driving, and low returns on insurance company investments. To combat these rising rates, drivers are actively seeking new insurance policies. When negotiating with your current insurer, be direct about your intention to leave and ask what they can offer to keep you. If they're willing to retain you, they may offer a better rate, adjust your deductible, or even suggest a pay-as-you-go plan. Pay-as-you-go plans involve a monthly fee plus a per-mile charge, but require close monitoring of your driving habits. When evaluating car insurance, consider your overall insurance profile, including home, renters, and life insurance. While price is important, remember that a good relationship with your insurer can be invaluable, especially during difficult times. Ultimately, it's crucial to assess all your policies holistically to ensure you're getting the best value and coverage.
Outlines
Introduction
This Chapter introduces the topic of rising car insurance rates and the impact on drivers. It highlights the increasing cost of car insurance and the growing trend of drivers seeking alternative solutions.
Causes of Rising Car Insurance Rates
This Chapter delves into the reasons behind the surge in car insurance rates. It explores factors such as increased car repair costs, a rise in accidents due to distracted driving, and low returns on insurance company investments.
Negotiating with Your Insurance Company
This Chapter provides advice on how to negotiate with your current insurance company. It emphasizes the importance of being direct about your intention to leave and asking for a better rate, deductible adjustment, or alternative policy options.
Pay-as-You-Go Insurance Plans
This Chapter introduces pay-as-you-go insurance plans, which involve a monthly fee plus a per-mile charge. It explains how these plans work and the implications for driving habits and privacy.
Keywords
Car Insurance
Car insurance is a type of insurance that protects car owners against financial losses arising from accidents, theft, or damage to their vehicles. It is typically required by law in most countries and provides coverage for various risks, including liability for injuries or property damage caused to others, damage to the insured vehicle, and medical expenses for the insured driver and passengers.
Insurance Rates
Insurance rates refer to the price that insurance companies charge for coverage. These rates are determined by various factors, including the type of insurance, the insured's risk profile, the coverage amount, and the geographic location. Insurance rates can fluctuate based on market conditions, claims history, and regulatory changes.
Distracted Driving
Distracted driving refers to any activity that takes a driver's attention away from the road, such as texting, talking on the phone, eating, or adjusting the radio. It is a major cause of accidents and fatalities, as it impairs a driver's ability to react quickly and safely.
Pay-as-You-Go Insurance
Pay-as-you-go insurance, also known as usage-based insurance, is a type of car insurance where premiums are based on the actual amount of driving done. This type of insurance typically involves the use of telematics devices that track driving habits, such as mileage, speed, and braking patterns. Pay-as-you-go insurance can be beneficial for drivers who drive less than average, as they may pay lower premiums.
Deductible
A deductible is the amount of money that an insured person is responsible for paying out of pocket before their insurance coverage kicks in. For example, if you have a $1,000 deductible on your car insurance and you get into an accident that costs $5,000 to repair, you would pay the first $1,000 and your insurance company would cover the remaining $4,000.
Telematics
Telematics refers to the use of technology to collect and transmit data about vehicles and their drivers. Telematics devices can track driving habits, location, speed, and other information. This data can be used for various purposes, including insurance pricing, fleet management, and driver safety.
Wall Street Journal
The Wall Street Journal is a leading American business newspaper published by Dow Jones & Company. It is known for its in-depth coverage of finance, economics, and business news. The Wall Street Journal is widely read by investors, business professionals, and policymakers.
JD Power
J.D. Power is a global marketing information services company that provides data and analysis on customer satisfaction and product quality. It is known for its automotive industry research, including its annual vehicle dependability study and customer satisfaction surveys.
Q&A
What are the main reasons for the recent surge in car insurance rates?
The increase in car insurance rates is primarily driven by factors such as higher car repair costs, a rise in accidents due to distracted driving, and low returns on insurance company investments.
What are some tips for negotiating with your current car insurance company?
When negotiating with your insurer, be upfront about your intention to leave and ask what they can offer to keep you. They may be willing to adjust your rate, deductible, or even suggest alternative policy options.
How do pay-as-you-go insurance plans work?
Pay-as-you-go plans involve a monthly fee plus a per-mile charge. These plans typically require the use of telematics devices to track your driving habits and ensure you're driving safely.
What should people consider when evaluating their car insurance?
When evaluating car insurance, it's important to consider your overall insurance profile, including home, renters, and life insurance. While price is important, remember that a good relationship with your insurer can be invaluable, especially during difficult times.
Show Notes
After rising 12% last year, average annual car-insurance rates in the U.S. are expected to increase by another 9% next year. Wall Street Journal editor Geoffrey Rogow joins host J.R. Whalen to discuss options drivers have in order to rein in costs.
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