Written by Just when you were getting used to automobile insurance premiums going lower for the last few years, they’ve started rising again.
Since I work in this industry I have access to information from major carriers and partners, and I can tell you that this planned rate increase has been coming since last summer and is due in almost completeness to the sub-prime mortgage meltdown.
Insurance companies as a result of losing millions upon millions of dollars in their investment portfolio over the course of a year must now scale back where they can to find profits. This includes writing less policies, or at the minimum not insuring as many policyholders with higher risk.
Like any industry, auto insurance is cyclical and while this rate increase won’t last forever, a downturn in car insurance premiums will take years not months so you’ll need to be smart about auto insurance for the next few years. A big recommendation is to re-evaluate your car insurance policy before your 6 month cycle is up. With higher prices comes increased competition, much like shopping around for anything whether it’s food or gasoline – someone is going to have a deal.
