Why It's Time to Shop for Car Insurance

so auto insurance rates have gone up quite a bit overall in the last three years and there are very specific reasons that are legitimate reasons why auto insurance rates have gone up all right first well the cost of repairing vehicles or when a vehicle is totaled the cost of the insurer paying off that vehicle both went way up because of the supply shortages that were so prominent in 21 and part of 22. both of those pressure points are relieving now but it was a true legitimate much higher expense level for auto insurers as people's Vehicles would be damaged or totaled what they were having to pay in claims so much higher and so that's absolutely a factor second Factor for some reason Americans are more Reckless behind the wheel today than they were four years ago we are driving more aggressively it seems like if you remember back in 20 with all the lockdowns and shutdowns and all that roads were wide open a lot of people developed some really bad habits driving much faster and all that and the accident rates have in many places around the country been meaningfully higher the death rates behind the wheel have been pretty ugly uh the spike has been surprisingly bad particularly when you think about how Road design is much safer than it used to be and vehicles are much safer than they used to be and so it this spike in fatality rates is disturbing all those things cost more money and then the third Factor no one ever talks about is that the way insurers ultimately make their money is off Investments and their Investments cratered along with the rest of us experiencing what happened with the marketplace and so all these have led to cost pressures That Vary per insurer and this is the key thing for you to know is that the cost of insuring your vehicle right now has a bigger disparity from one insurer to another than it normally would it's always been true that there are advantages to shopping your auto insurance because the way you're rated by one insurer or the way premiums are set for your driving profile with one insurer could be very different will be very different from another insurer another another like that but now because different insurers are having different experiences with their investment portfolios may have had different experiences with overall claims and costs associated with those there are bigger disparities and bigger benefits to you shopping your auto insurance so I encourage you to do so because you remember when you do shop the same coverages from one insurer to another do not say let them say oh well we'll save you all this money but then look behind the curtain they may be selling you what many places are called State minimums instead of the level of coverages you have otherwise I talked with a gentleman who owns a body shop recently and how do you end up talking with someone who owns a body shop well because your vehicle was damaged and so we have a vehicle that I should say that was actually a good story of human nature um a woman hit our park car that went in the car and stayed instead of fleeing the scene I was talking to when I was talking to the owner of the body shop a uh claims specialist with one of the major insurers came in he was laughing he said that's one I haven't heard lately that somebody stayed when they could have gotten away uh but anyway I digress that was really great that the woman was on a state and took her lumps for having hit a parked car but anyway The Body Shop man was talking about how many people now have too low of coverages and when they have a problem where they need to get their vehicle repaired they're so underinsured they're out of pocket or if their state permits too little coverage for the damage they caused to somebody else they run through all their coverage then they face being sued for the remainder so be careful what your coverage limits are don't take low coverage limits just to get a lower premium make sure you have that adequate coverage years ago I told you a story about a very successful surgeon who ended up bankrupt because he bought State minimums on insurance his teenage daughter had an accident that caused severe injuries to someone in another vehicle her fault and it bankrupted the family so make sure you have those adequate coverages as you shop around and get quotes but get those quotes

Channel: Clark Howard: Save More, Spend Less

Views: 5,053

Keywords: clark howard, clark, money, financial literacy, finances, money podcast, podcast, financial podcast, consumer, consumer advocate

Id: m7qDniyO8I0

Length: 6min 8sec (368 seconds)

Published: Fri Mar 03 2023