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Car Insurance

Discover How Auto Insurance is Changing

If you’ve wondered whether there might be changes in your auto insurance policy this year, you are not alone.

With the uncertain 2017 economic outlook and a new political party in power, we can expect to see changes in a number of areas. At this point, a number of personal and business tax deductions are under review along with regulatory reforms plus new and revised trade policies. Car insurance is also in play. 1)

Contributing Factors Affecting Auto Insurance Prices

In additional to the items mentioned above, another factor that affects price is that the era of cheap gas is coming to an end. According to Market Watch, 2017, gas prices may reach a three-year high compared to 2016 gas prices. The lower gas prices motivated people to take advantage of cheaper gas and enjoy things they have been postponing whether it was a vacation, a trip to the beach, or visiting friends in remote areas.

Another issue that affects automobile use is based on the psychology of fear that is now a big part of our society. Americans are extremely afraid of terrorism even more so than guns that are-3210-times-likelier-to-kill-them/Jan 31, 2017. 2)

With this fear-filled mindset, many Americans are of the opinion that driving is much safer than flying. For them, this is a safer reality. As a result of all of these contributing factors, more people are driving. With more drivers, there are more accidents, more distracted drivers on the road, increased auto insurance accident claims, greater losses, more deaths, and injuries.

According to a report in the Wall Street Journal, Americans can expect to find a 2017 rate increase in automobile insurance as a result of drivers who are addicted to their smartphones. To say that it is a dangerous habit is an understatement because it’s way beyond that. Drivers are more careless, much more distracted, and extremely dangerous behind the wheel the wheel of a car. if you combine this love affair with smartphones and the increased use of legal and illegal drugs along with alcohol consumption, it gets worse. As a result, automobile insurance firms have no choice but to raise the rates. 3)

According to information about distracted driving from the Center for Disease Control (CDC), a person who is driving a car at 55 mph and is also composing and sending a text message takes his, or her eyes off the road long enough to cover a football field. The CDC information also states that in America, over eight people are killed every day along with 1.161 who are injured in car crashes caused by a distracted driver.

The following behavior may take you by surprise. In reviewing consumer behavior patterns, we find that people tend to shop for new auto insurance after filing a claim; even when accident results turned out in their favor. This decision to get a new auto insurance quote usually takes place during the 6 to 12 months following an automobile accident.

Changing auto insurance carriers is something that many people feel is a wise move. That being said, the reality is that for the insurer, it is a very expensive change with higher auto insurance rates. Frankly, this type of decision makes no sense at all, but it’s hard to explain the reality of increased costs to someone who believes their version of a wise financial move.

Increases in more severe loss developments may adversely affect new vehicle sales from boosting auto insurer profitability. Additionally, ride-sharing and self-driving cars threaten to eliminate millions of insurable risks. The exception to this might be that commercial auto insurers and product liability carriers could benefit from these developments as a result of shifts in ownership and responsibility. These developments are changing the way policies are written.

As more self-driving cars slowly attempt to enter the market, the question of liability in the event of an accident becomes a major factor. One more vital point is raised with the question of exactly who is responsible if the WiFi that controls the car fails? This could happen because the WiFi may have to deal with challenges including problems streaming from the cloud, bad weather, or simply driving in a rural area.

We hope that you have found this information helpful.

 

Sources:

1) https://www2.deloitte.com/us/en/pages/financial-services/articles/insurance-industry-outlook.html

2) The psychology of why Americans are more scared of terrorism than…

qz.com/898207/the-psychology-of-why-americans-are-more-scared-of-terrorism-than-guns-though-guns-are-3210-times-likelier-to-kill-them/Jan 31, 2017

3)  WSJ will consumers spend more for car insurance

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