Auto insurance companies have experienced fewer claims this 2020 due to the Covid-19 pandemic. With lots or repair companies on hold during the heat of the pandemic, the price for auto insurance is likely to increase further.
Auto repair shops that were able to function during the pandemic increased the cost of repairs. Inevitably, this halt has stirred a change in the auto insurance prices offered by most companies.
Prior to the covid-19 pandemic, car insurance prices were still very much on the rise. Although we try as much we can to make prices affordable for our customers and offer cheap car insurance online, the rates have to be profitable for us too. We will discuss some reasons why insurance prices are likely to change in the coming year.
Increase In Car Theft
The rate at which cars are stolen is on the increase and may grow further as we move into the new year. Studies and investigations show that vehicle offense such as theft and taking a vehicle without permission from the owner has increased to about 10%.
Many expensive cars are being stolen on a daily basis thereby increasing claims to about 40% more than the usual annual claims for vehicle theft. This is affecting the profits of many insurance companies and they are left with no other option than to increase the prices of the car insurance coverage they offer.
Sophisticated Vehicle Technology
Car parts that make use of sophisticated vehicle technology have dominated the car production industry. These parts are becoming really expensive to acquire. What’s even worse is that they are position in areas prone to damage in the course of an accident.
Some of these parts include speed limit devices, automatic emergency braking systems, blind spot sensors, etc. These parts are mostly always damaged as a result of an accident and this makes car repairs very expensive.
Insurance Fraud And Opportunistic Scams
Irrespective of the cautionary measures taken by insurers to fight against online car insurance fraud, we’ve seen a massive increase in insurance fraud and it may rise further in the coming year. Insurance fraud is literally an attempt to exploit an insurance contract for your benefit or financial gain.
Due to the covid-19 1pandemic, a lot of people lost their jobs or have been out of work to do. In other to gain funds for themselves they might resort to exploiting their insurance contract by placing false or exaggerated claims. This will cause a spike in the price of car insurance in the coming year.
The world is changing and we are at an even greater risk of so many natural hazards occurring in 2021. Areas, where natural disasters happen the most, will definitely increase the price of the car insurance coverage they have. This is because many claims will be coming in due to damages from natural disasters.
However, irrespective of the price increasing as time goes by it may decrease eventually. It is, therefore, necessary to still own car insurance because accidents are on the rise this period. Better to be safe than sorry.