Car insurance is becoming more expensive, and many drivers wonder why. Here are the main reasons behind the rising premiums:
Rising repair costs
Cars are becoming more advanced with technologies like driver assistance systems, sensors, and electric drive trains. While these innovations improve safety and driving experience, they also make repairs more complex and costly. Even minor damage, such as a dented bumper, can be expensive due to the need to replace integrated sensors. This increases costs for insurers, leading to higher premiums for drivers.
More traffic accidents
With increasing traffic volume, the number of accidents continues to rise.Additionally, distractions like smartphones and navigation systems make drivers less attentive. More traffic accidents result in a surge of claims, directly affecting the rates that insurers charge.
Inflation
General economic inflation, including rising wages and more expensive car parts, means insurers must pay more for claims. This forces them to raise premiums to remain financially stable. Additionally, rising medical costs lead to higher payouts for injury claims, further impacting insurance rates.
Climate change and natural disasters
Extreme weather events such as heavy storms, hail, and floods are becoming morefrequent. These events cause significant vehicle damage, leading to higher payouts by insurers. Since these disasters are becoming more common and severe,insurance companies must adjust their risk models, resulting in increased premiums for drivers.
