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2 Reasons why car insurance costs can rise 20%

Car insurance rates are rising across the country, with some people paying 20% ​​more this year, according to a Wall Street Journal report. The rate

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Car insurance rates are rising across the country, with some people paying 20% ​​more this year, according to a Wall Street Journal report.

The rate hikes are the result of two key factors, the newspaper reported.

As you might expect, inflation is one driver of higher costs. Insurers are turning to government officials and trying to get approval to charge higher rates “for what they believe will be more sustained inflation,” according to the WSJ.

The cost of car repairs and the replacement of vehicles has risen significantly over the past few years. In addition, a shortage of car parts and body technicians means that insurance companies sometimes have to provide rental cars for longer to policyholders whose vehicles have been damaged.

Another factor driving higher premiums is an increase in serious car accidents. Last year, traffic fatalities were higher than at any stage in the last 16 years.

Many consumers are already seeing premium increases as they renew their policies. But the increases differ from place to place.

The WSJ notes that states such as California have been reluctant to approve the price increases. In many other places, however, interest rate hikes are underway.

Elyse Greenspan, an analyst at Wells Fargo Securities, told the WSJ that from mid-2021 until now, car insurers had received increases on about 61% of personal car premiums.

If the thought of an even higher cost makes you cringe, see if a company like The Zebra can get you a lower rate.

Within minutes, The Zebra can compare rates at hundreds of providers and show you which options are your best option.

For more information on The Zebra and other ways to save, check out “7 Smart Ways to Fix Your Finances in 10 Minutes (or Less).”

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