PHOENIX — Have you noticed car insurance rates have skyrocketed lately? It's leaving cash-strapped drivers paying more.
According to the rate comparison website, Insurify, people can expect their car insurance premiums to go up by 7% this year.
That's on top of a 9% percent increase in 2022.
And a recent Lending Tree study predicts Arizona is set to have the second-highest rate increase in the entire country this year.
"They've suddenly gone way up, like way up!" said driver, Kierra Guerro, who says her premium increased from $200 to $400.
"Yeah, that's a lot," she lamented.
Michael Barry, Chief Communications Officer with the Insurance Information Institute, says there are two main factors causing the spike in rates.
One is lingering supply chain issues, where repair shops are having to wait on parts, leaving insurance companies paying out more for claims and rental cars.
Berry says the other factor comes down to eroding driving habits.
"The big picture is auto insurers, not only in Arizona but nationwide, are seeing an increase in the frequency and the severity of accidents," Barry said.
Insurers are paying out more for car repairs, injuries to people, and any litigation that comes with it. In fact, last year, Barry says, insurance companies actually operated at a loss.
"In 2022 these auto insurers paid out more in claims than they did in premiums. That's known as the combined ratio, which was over 100, which means auto insurers were paying out a little over a dollar for every dollar they were taking in in premiums last year," Barry said. A good portion of that cost burden is being passed down to drivers.
"Yeah, the rates have definitely gone up," said driver, Costi Haig, who places much of the blame on the current White House administration. "I keep watch on pretty much all of it, the economy, the housing market, insurance, gas prices, I watch all of it," he said.
"It stresses me out, it's less money!" Guerro said.
Barry says Arizona ranks 21st in the nation for most expensive car insurance rates.
To help save money drivers should review their policy, as many people do automatic bill pay renewal and may not even realize there's been a rate change.
But mainly, Barry says, ask your insurer about discounts for things like low mileage commutes, safe driving, and student driver discounts for good grades.
And of course, he says, shop around for the best rate.
