BOSTON – Car and auto insurance bills are going up in Massachusetts and across the country, and they’re a lot higher than some drivers expected.
Tom Skelly, vice president and partner at Deland, Gibson Insurance, said the cost of repairing cars has increased “exponentially” and it’s not just because of inflation. Here’s his full explanation of why you’re paying more.
More expensive technology in cars
“There is more technology in every part of a car, including windscreens, fenders, bumpers and grilles. All the electronic sensors for automatic emergency braking, lane departure warning or forward collision warning systems are in the bumpers, grilles and fenders of cars. They bear the brunt of most crashes.
Microchip shortage
“Supply chain issues continue to plague the car repair industry. Microchips, which are used in all technical parts, are still in short supply, delaying repairs. We have had to call the carriers to extend people’s rentals beyond the warranty period because of the delay in materials. These costs are being passed on to the consumer.
Car mechanics wanted
“There is a shortage of car repair technicians. Those that remain need constant training to keep up with the complex systems they repair. For example, the paint on the sensors needs to be a certain thickness or the sensors will not work. The connections between the car and the sensors must be calibrated for the sensors to work properly. All of this requires a skilled technician and time, which increases costs.
More accidents, more insurance losses
“Insurance companies are facing increasing losses due to the increase in car accidents and fatalities as a result of the pandemic. Most carriers are trying to keep their claims ratios below 100. Most have loss ratios above 100 for 2022 and 2023 looks to be the same. For example, a loss ratio of 108 means $1.08 in claims for every $1.00 in premium. Across all lines, auto, property and casualty companies are facing higher losses. That means higher premiums to cover those losses.
If you end up with a higher bill and no changes have been made to your account, Skelly recommends asking your agent to shop around for lower premiums or higher deductibles.
