Auto insurance premiums are high, but ‘millions’ may still not be enough, experts say

thanks to inflationyou’re likely paying more for almost everything these days, and auto insurance is no exception.Insurers have cut premiums by an average of 8.3% so far this year, according to data from S&P Global Market Intelligence. is rising and consumer costs are likely to continue to rise. Bankrate analyst says.

For insurance companies, higher premiums make sense. Rising costs to pay claims mean that insurers will have to accept more from their customers to respond. But for drivers, it means paying a higher premium for the same coverage.

Depending on your policies, that can be a big deal, says Cate Deventer, insurance writer and editor at Bankrate. “Rising costs mean coverage may not be what it used to be,” she says. “Millions may not have adequate insurance. ”

Why insurance experts say you may not have enough coverage and why it’s worth looking into your current insurance to make sure you don’t have to pay out of pocket in case of an accident is shown below.

Why Auto Insurance Doesn’t Provide Enough Coverage

The first step to getting adequate coverage is understanding how your current insurance works. “People buy insurance policies and pay their bills every month without seeing what they actually have,” he says.

Your policy may include comprehensive collision coverage that covers various types of damage to your vehicle and other coverage that pays medical bills in the event of an accident.

However, an important coverage area to focus on is liability coverage, Deventer said. If you are found to be at fault in an accident, this will cover damage to property or other vehicles, medical expenses for other drivers, and any lawsuits you may face.

In the unlikely event of an accident, we will pay the insurance amount up to the insurance amount of the contract. If your damages exceed what the insurance company pays, you may end up paying the difference.

In addition, the costs associated with auto accident insurance claims are on the rise. For example, auto parts prices have risen 13.4% over the past year. According to the St. Louis Federal Reserve Bank.

The cars themselves are also getting more complicated, says Deventer. “What used to be a bumper dent can now become camera and sensor damage.”

Next is medical expenses. In 2020, auto insurance companies paid an average of $20,235 for personal injury claims from auto accidents. by Insurance Information InstituteHowever, in the last 12 months, healthcare prices have increased by 5.6%. According to the Bureau of Labor Statistics.

This is a concern, especially if you have the state’s minimum auto coverage. In a handful of states, policies only require that he covers $15,000 or $20,000 in medical costs per person in the event of an accident, and Floridians purchase medical liability insurance. You don’t have to.

This means that even the average medical claim can be thousands of times more than your insurance covers, and especially expensive accidents can leave you in financial trouble.

No need to pay more for better coverage

If your premiums are already rising, you may not be thrilled with the prospect of paying more to ensure you are adequately covered.

On average, full-coverage auto insurance with state minimum liability coverage costs $135 per month. at bank rateUpping your liability insurance to the $50,000/100,000/50,000 model (i.e. $50,000 per person for medical, $100,000 max per accident, $50,000 for property damage) would mean paying an average of $142, or $7 per month. It will be a burden.

Some insurers allow you to tweak your coverage on their website or mobile app, but sometimes you need to talk to an agent. “They will be able to understand your specific needs,” she says.

If you think it’s expensive to extend your coverage, first ask your agent which popular discounts apply, such as safe drivers and paperless accounts. You can also find better rates and more robust coverage by switching insurance companies.

“It’s more important than ever to repurchase to find the rates and policies that work best for you.” policy genius“It’s best to consult an independent agent who is unbiased and can find you the best rates.”

If you’re considering lowering your premiums and coverage in case of an accident, remember that your insurance policy protects you from potential financial disasters.

“It’s not fun to pay more, but this is a very critical time to do it,” says Deventer. “Insurance is designed to protect your finances. It protects your financial health in the event of an accident.”

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