Because car prices in general have skyrocketed, more Americans are keeping their current cars for longer. This means costly repairs can become more likely, and the car insurers have adjusted their rates accordingly.
In the last year, car repair prices also climbed 7 percent, outpacing inflation by more than double.
A supply chain slowdown and ongoing labor shortages have also pushed the insurance industry to implement price hikes on customers, insuranceQuotes.com analyst Michael Giusti said.
“None of that even mentions the higher medical costs they have to pay after accidents,” Giusti said. “Today’s higher premiums are just a reflection of those higher costs.”
The sudden rise of electric vehicle purchases also carried some of the blame, since EVs are more expensive to purchase and repair, Henn said.