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PEMCO Insurance: Why auto insurance rates go up

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SEATTLE - Most of us are no longer a teenager, our car is getting older and we haven`t racked up a bunch of tickets or accidents; so why does it seem like the price for car insurance never seems to go down?

Q13 sat down with the experts at PEMCO to find out.

"As strange as it sounds, there are some good things driving up the trend," Underwriting Analyst Brad Kormylo said. "We have a strong economy, low gas prices, a booming population, all of those things mean more people on the road, driving more miles and unfortunately it means more accidents as well. Another factor is our cars continue to be improved with better technology that helps keep us safer- things like blind-spot warnings, automated brakes, lane sensors, all of these help keep us safe but it increases the cost to repair or replace a vehicle."

Unfortunately, there are some negatives factors also contributing to the cost. Distracted driving is now a leading cause of accidents, right up there with speeding and drunk driving.

So, is there any end in sight to the rising cost of insurance?

"Yes, we do believe there is a tide that will turn we just are not there yet," Kormylo said. "If we think about the average age of the cars around us on the roadways, these days they are 11 years old and have pretty limited safety equipment. As those cars continue to age and are replaced on the road with safer cars, we will see that those trends help drive insurance rates down."

The Wall Street Journal estimated that once self-driving car technology becomes truly widespread, we could cut auto accidents by 90%.

Some predictions say that when we reach that point, auto insurance premiums could go down by 40%.

Until then, PEMCO has some suggestions:

  • Keep your driving record clean: mind the rules of the road and lower your risk of getting a ticket
  • Park in your garage: your car is less likely to be stolen or vandalized
  • Consider a higher deductible: you'll pay more out of pocket in the event of an accident if you have one
  • Ask your insurance agent about discounts: companies frequently update discount packages to stay competitive
  • Choose a car that is cheap to insure

The experts at PEMCO say the most important thing to do is never cut coverage. It may save you money temporarily, but will cost you in the long run if you get in an accident.

 

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