Cheapinsurance.com has compiled a list of how the pandemic has affected the cost of car insurance from a collection of experts and government sources.
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The coronavirus pandemic has affected the global economy in all sorts of ways, some less obvious than others, such as its effect on auto insurance rates.
Many factors cause rate changes, including labor shortages, supply chain delays and changes in driving habits. Some of these have less apparent effects: with fewer new cars available, for example, people keep older cars longer, even though they may have higher maintenance needs and less safety equipment. advances. Those who buy cars can buy more expensive models with high-tech additions that are expensive to replace.
During the pandemic, people drove further, although the number of accidents per mile driven remained the same, according to the Insurance Information Institute. So there were more traffic-related fatalities and more insurance claims filed. Drivers also reported speeding more often than before the pandemic. With the unemployment rate falling and many businesses returning to the office, more and more people are driving to work.
Automotive technicians are in short supply, making repairs more costly
In 2021, car insurance rates haven’t increased much, but with 2022 coming to an end, Cheapinsurance. To see also : What is raising the prices of car insurance?.com has compiled a list of how the pandemic has affected the cost of car insurance from a collection of experts and government sources.
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Replacing a totaled car is more expensive as the price of vehicles rose during the pandemic
If your car is damaged in a collision or accident, you’ll need an auto technician to diagnose and fix what’s wrong. But these workers are rare, so their prices go up. Read also : Elephant Car Insurance Review 2022 – Forbes Advisor. Shortage was a problem even before the pandemic: low wages, an uncertain career path, and the tendency of young people to avoid commercial jobs left dealerships and auto repair shops struggling to find workers.
Tech Force Foundation, a non-profit organization focused on developing the professional technician workforce, reported that some 797,530 technicians will be needed in the automotive, diesel and collision fields through 2025. Some observers hope that as the country transitions to electric vehicles, the chance to be on the cutting edge of new technologies will draw more workers into the field.
From semiconductors to windshield wipers, supply chain disruptions contributed to more expensive repairs
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A tight market and strong demand have sent new and used car prices skyrocketing. According to Kelley Blue Book, a car price compiler, the average price of a new car was $48,043 in July 2022, up 22.9% from July 2021. Consumer Reports recommends considering a car new rather than used if you are looking for a model from the last three years (or less) as the costs could be similar.
Even after pandemic-related supply chain bottlenecks eased and dealerships were able to restock inventory, new cars remained out of reach for some Americans. Rising interest rates, the result of the Federal Reserve’s inflation-fighting efforts, mean auto loans are too expensive for some potential buyers.
Car accidents are happening more frequently
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The price of auto parts, whether tires or wiper blades, was up about 20% from 2021, and more parts were out of stock due to bottlenecks. supply chain bottleneck. A lack of new cars available over the past two years means that the average age of vehicles on the road is around 12 years old, older than average.
As a result, auto dealerships and repair shops are receiving more service requests than ever. These older vehicles often require larger and more expensive repairs, such as transmission replacement. Car owners are also waiting longer than usual for repairs. And they may not have been offered a loaner car in the meantime because dealerships are running out of vehicles to sell, let alone loan out.
For many, auto insurance costs didn’t increase between 2020 and 2022
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The National Highway Transportation Safety Administration estimated that 42,915 people died in motor vehicle crashes in 2021. This represents a 10.5% increase from 2020, the highest number of fatalities since 2005 and the largest annual percentage increase in the history of the agency’s death analysis reporting system.
Notable increases included fatalities from multi-vehicle collisions and accidents on urban roads, which increased by 16%; deaths of people aged 65 or over, up 14%; pedestrian fatalities, up 13%; and fatalities in crashes involving at least one large truck, up 13%, according to the National Highway Transportation Safety Administration.
The number of miles driven by drivers in the United States in 2021 increased by about 325 billion miles, or about 11.2%, from 2020. But despite this increase, the fatality rate per mile driven remained about the same as in 2020, or 1.33 deaths per 100 million. vehicle-kilometres traveled in 2021 compared to 1.34 fatalities in 2020. The bipartisan infrastructure act signed by President Joe Biden includes up to $6 billion over five years for various efforts to reduce crashes and fatalities.