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By: Aquib Nawab
Finance
The disruptions in supply chains during the pandemic have led to escalated costs in car repairs. This, in turn, contributes to higher insurance premiums.
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During the COVID-19 pandemic, reduced driving led to a temporary drop in insurance premiums. However, as people resumed their pre-pandemic driving routines, accident rates soared, resulting in increased premiums.
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Car thefts are also soaring, with the number of thefts topping 1 million in 2022, according to the NICB. A notable spike in vehicle and catalytic converter thefts has translated into higher insurance claims and rates nationwide.
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While electric vehicles (EVs) are lauded for their environmental benefits, they come with higher insurance costs due to the excessive expenses associated with repairs and replacements.
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General inflation has permeated all sectors of the economy, including car insurance. As the costs of vehicle repairs and replacements rise, insurance premiums escalate accordingly.
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Customer satisfaction with insurance companies has plummeted due to prolonged claims processing times. This has an indirect impact on insurance costs, with ancillary expenses like rental cars adding to the financial strain.
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The escalation in extreme weather events, such as storms and wildfires, has escalated the risk to vehicles. Insurers are passing on the costs of these calamities to customers, particularly in regions susceptible to such phenomena.
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Conducting thorough research on insurance costs before purchasing a vehicle can aid individuals in making informed decisions that balance other factors with insurance expenses.
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Maintaining a commendable credit score can result in lower insurance premiums. Conversely, drivers with less-than-stellar credit can still find affordable coverage by exploring diverse options.
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Opting for higher deductibles and forgoing unnecessary coverages can help trim insurance costs while ensuring adequate coverage. According to analysts, increasing your car insurance deductible can net you savings of 7% to 28%.
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