Ouch! Why do my auto insurance rates keep going up?

We are hearing this from many of our clients and they are right – auto insurance rates ARE increasing. The reason is that auto insurance loss trends are outpacing rate increases. Insurance carriers have been raising rates for a few years now, but it’s just not enough – at least not through 2016. The industry does expect these trends to improve slightly in 2017, but unfortunately, carriers are still trying to figure out why their sophisticated data analytics around risk selection, price segmentation and predictive claims models isn’t working any longer.   

So if it feels like your auto insurance rates are on the rise, they most likely are and here’s some reasons why:

People are driving more – we drove 3.148 trillion miles in 2015, up 3.5% from 20141.  More miles driven means more cars are on the road and this leads to a higher probability of accidents.

Bodily injury claims have risen 32.1% between 2005 and 20132 – This is attributed in part to an increase in accident severity and cost of medical care.

Distracted drivers – 87% of drivers say they engage in risky behavior behind the wheel, 70% admit to talking on their cell phone while driving and 42% say they read text or emails while driving3

Cell phone usage – 1 in 4 car crashes involve cell phone use4.

New Vehicle Technology – Newer cars make driving easier and more fun but all this advanced technology is expensive to repair after a collision. None of these features were available 20 years ago and are now becoming mainstream: backup cameras and lasers, night vision with pedestrian detection, automatic high-beam control, electronic dashboards that can wirelessly stream calls, data and text messages from cell phones, side mirror intuitive parking assist, etc. The average repair cost for automobiles involved in accidents rose 19.3% from 2009 to 2016, and 3.8% in 2016 alone5.

At The Partners Group, we can’t predict where auto insurance rates will go from here, but we can help you weather this insurance storm. Now is a perfect time to meet with your agent for a complete household review to make sure you are getting the best value for your premium dollar. We will also look for additional discounts you might be eligible for and make recommendations that could save you money.

Author:
Carrie McHale
Managing Director, Personal Lines
503.941.4324, cmchale@thepartnersgroup.com

Founded in 1981, The Partners Group has been serving the financial and insurance needs of employers, medical professionals, and successful individuals for over 35 years. We are an independent consulting firm with services including employee benefits, business consulting, retirement planning and investment services, commercial and individual insurance. The Partners Group has offices in Bellevue, WA; Portland, OR; Lake Oswego, OR; Bend, OR; and Bozeman, MT. For more information, please visit https://www.thepartnersgroup.com. 800-722-6339.

  1. US Department of Transportation’s Federal Highway Administration
  2. Insurance Research Council
  3. AAA Foundation Report
  4. National Safety Council estimate
  5. CCC Information Services
2017-10-18T15:29:40+00:00

Employee Benefits

The Employee Benefits Division of The Partners Group serves the employee benefit needs of over 500 West Coast employers, with offices in Portland, Lake Oswego, and Bend, OR; Bellevue, WA; and Bozeman MT. Our benefits consulting team specializes in providing a highly-consultative approach coupled with problem-solving wellness analytics, to help employers reduce healthcare costs, improve employee health, and create long-term health plan stability.

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The Business Consulting Division of The Partners Group is dedicated to consulting with healthcare systems and jumbo employers to manage the health and well being of their employees, families, and communities. Our focus is to provide an innovative, solution-oriented service that capitalizes on data to pinpoint potential problems. Whether it be uncovering potential sources of escalating healthcare costs, or other anomalies in data, this service provides endless, problem-solving advantages to a variety of industries.

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The Partners Group Commercial Insurance Division manages the business risks for hundreds of employers. We provide an unmatched depth and breadth in commercial insurance and risk management services combined with extraordinary people who possess an unusual ability to connect on a personal level. We work hard to understand the unique risks and exposures of your business, and identify the solutions to provide the right coverage for the right price. As an independent company The Partners Group can tailor solutions to work specifically for you, even creating new policies and programs, if that’s what you need.

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The Partners Group Private Client Services Division advises business owners and high income shareholder groups comprising just over 3,200 successful individuals, families and medical professionals on investment services, retirement planning, and personal insurance. We’ve been in business for over 30 years as a privately held company based in the Northwest, and we’re here to stay. Additionally, we are not tied to products and plans. We provide various platforms and a multitude of options to fit your needs, which can change over time as your life changes. When you work with TPG Private Client Services, you’re dealing with the shareholders of this firm, and we are honored to play a role your life, your family’s lives, and your next generation’s lives.