Why Do Auto Insurance Rates Increase?

Hi, I’m Zach [Nuccio 00:00:02] from [Tunnell 00:00:03] and Associates, Allstate Northbrook. Auto insurance rates these days are going up for everybody as you may know. This is for a couple of reasons. Insurance to begin with is a pool, which means everybody is in that pool together. As people pay into this pool, claims get paid out. The more amount of claims that are paid out, if it isn’t matching what’s being paid in by premium, then everybody’s insurance rates increase whether or not you’ve had an accident yourself or not. Furthermore, everybody you as see driving around is just driving distracted. Everyone’s text messaging or doing something on their cell phone. This has resulted in a higher frequency of claims. Due to the newer vehicles being much more technologically advanced, the trade to repair these vehicles is much more skilled, which means they get paid more. Materials cost more. You have a perfect storm of more distracted driving, which creates more claims. The claims are larger with payouts, results in unfortunately higher auto insurance for everybody.

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