Are Car Insurance Rates Going Up in 2022?

Paying for car insurance is a required expense for every driver. No matter which state you live in or type of car you drive, insurance coverage is needed. If you’re lucky, you can find a decent rate by comparing premiums online. Websites like Zebra and Insurify allow drivers to separate the good from the bad quotes within a matter of minutes. With that said, a wide range of drivers will notice this year that car insurance rates are on the rise. Keep reading to find out why.

What is causing the increase in car insurance rates?

Both economic and societal factors are the reason behind higher car insurance rates in 2o22. Here are the top reasons drivers are having to adjust their living expenses:

Inflation

Inflation is disrupting the economic wellbeing of just about every industry right now. Food costs, housing prices, and even car insurance premiums are feeling the impact from this economic storm. Because of the spike in new and used car prices, the cost of insurance is following suit. Unfortunately, inflation is the main factor attributing to the rise in car insurance rates and it’s safe to say that no driver is happy.

With inflation taking off, I heard Geico’s new ads are going to say, “Waiting fifteen minutes could cost you another 15% or more on car insurance.”

— Mark Gonsalves (@MarkCongressGA7) December 24, 2021

Supply chain

The chip shortage has taken a major toll on automotive production. As a result, supply chain disruptions created lower volume inventories across the nation. What this means for drivers is that the cost of owning or leasing a vehicle is a bit (or a lot) more than it used to be. The lack of important materials has certainly given rise to the spike in car insurance rates. The worst part of all, the chip shortage is reported to affect vehicle production well into 2022 or 2023.

Decrease in car ownership

The pandemic did more than change the way we work. It also significantly impacted how often we drive. In early-pandemic times, stay-at-home orders and remote work took the place of daily commutes. For this reason, the need for a vehicle, or perhaps the value of one rapidly decreased. Now peg that together with high MSRPs and the decrease in car ownership is practically inevitable. Until drivers can afford car ownership again, the price of insurance will remain high too.

Will all car insurance rates be affected?

The premium increases will depend on your specific policy or the type of insurance provider you choose. Although reports show that the majority of companies are likely to increase rates in 2022, keep in mind that your premium is often determined by your previous driving history. As a result, having multiple car accidents or tickets on your record will contribute to a higher premium as well.

Our best advice: shop around. When insurance rates start to rise, don’t feel like you’re locked in to one policy. Take the time to explore other options and find the rate that best fits your lifestyle.