Miami Herald (Sunday)

Car insurance is surging. Here’s why — and how you can save

- BY ERIN MCCARTHY The Philadelph­ia Inquirer

When Imani Porter received the quote for her car insurance renewal in December, she was flabbergas­ted.

Geico, which had insured her and her fiancé’s Honda CR-V for the past year and a half, was going to charge the couple about $1,000 for the next sixmonth period.

“I did the math from a year prior and I noticed it went up by 35%,” said Porter, a 27-year-old project manager in the finance industry. “No reasoning. We didn’t have any accidents or tickets. We never even called them. The only communicat­ion we had with them was to pay our bills.”

Porter said she assumed the jump was due to the city’s surge in car thefts and reports of tires being stolen off Hondas in her Northern Liberties neighborho­od.

When she called Geico, a customer service representa­tive could cite only inflation.

Car insurance rates have actually outpaced inflation. Premiums increased nearly 20% over the past year, far higher than the broader rate of 3%, according to the latest federal data. U.S. consumers pay on average $2,542 a year for auto insurance, Bankrate found in its January report, with drivers shelling out anywhere from $62 to $212 per month, depending on their level of coverage.

Several factors are to blame for surging premiums. While there are signs that prices of new and used vehicle may be coming down, car prices remain higher than they were pre-pandemic, noted Greg McBride, Bankrate’s chief financial analyst, and newer, more technologi­cally advanced cars are increasing­ly expensive to fix.

Consumers can also see higher rates for more personal reasons, such as where they live, their driving history and habits, what kind of car they drive, their occupation, credit history, even their age and gender (though not in Pennsylvan­ia, one of six states where insurers aren’t legally allowed to use gender as a factor).

But these more individual­ized factors don’t account for the current spike, said Bob Passmore, department vice president for personal lines at American Property Casualty Insurance Associatio­n, the country’s main trade organizati­on for home, auto and business insurance.

“Whether you’re a good driver who has never had an accident or a ticket, or a bad driver who’s had accidents and tickets, everybody’s costs are going up,” said Passmore, although drivers whom insurers deem riskier will see even higher rates as a result. “You’re seeing this in every state.”

Residents of cities such as Philadelph­ia may see higher premiums than drivers who live in the suburbs, but Passmore said rising numbers of car thefts are not as much of a factor as consumers such

 ?? HEATHER KHALIFA TNS ?? Philadelph­ia resident Imani Porter on Jan. 18. She said an insurer wanted to increase her rate 35%, citing inflation.
HEATHER KHALIFA TNS Philadelph­ia resident Imani Porter on Jan. 18. She said an insurer wanted to increase her rate 35%, citing inflation.

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