It seems the price of everything is going up because of inflation, and car insurance is no exception. A new report from ValuePenguin predicts that auto insurance rates will rise by 0.6% this year after going down a bit last year.
According to the report, drivers in 22 states will face higher premiums in 2022, with the average motorist nationwide paying $1,935 a year.
The survey found that COVID-19 has very little to do with the anticipated rate hikes. Researchers also point out that insurance companies are not likely to give out COVID-19 discounts to drivers unless there is another nationwide lockdown.
It predicts that drivers in Michigan, Florida, and Louisiana will pay the highest auto insurance premiums this year. Drivers in Maine, Texas, and Wisconsin should get the lowest car insurance premiums in the year ahead.
"Prior to 2020, we saw premiums increase anywhere from 5% to 6%. Rates increased every year from 2011 to 2020," said Divya Sangam, insurance spokesperson at ValuePenguin.com, "While Insurers may not be giving out COVID discounts, there are still ways to save. 76% of Americans who shopped around for insurance say they saved hundreds of dollars doing so."
Consumers give low ratings to major insurance companies
In fact, if you have been with the same insurance company for five years or more, you are probably paying more than you should. Previous research has shown that the industry as a whole tends to increase rates for longtime policyholders, saving the best rates for new customers.
Car insurance advertisements are sometimes funny and entertaining because auto insurance rates are determined by a lot of things that can’t be covered in a thirty-second commercial. So consumers should do their homework, starting with consulting online reviews that show what other consumers like and dislike about various companies.
When we analyzed reviews posted at ConsumerAffairs, we discovered that the big four insurance companies are not that popular. On a 5-star rating system, the average rating was only 1.95 stars.
Here’s how the big four stack up:
State Farm: 3.4
State Farm was the highest-rated car insurance company of the four we studied. Jacqueline, of Alexandria, La., gave State Farm 5 stars, mainly because she thought she received fair rates.
“You can get discounts for multi-car, safe driving etc.,” Jacqueline wrote in a ConsumerAffairs review. “Whenever I have had a claim they paid promptly and my rates did not increase. I have been insured with State Farm for about 20 years. I have gotten quotes from other auto insures and the rates were higher with less coverage.”
The ConsumerAffairs research team has done a deep dive into the policies offered by a number of different carriers, vetting 50 car insurance companies that are rated by more than 28,754 customers.