PHOENIX — Car insurance rates are going up in Arizona and across the country.
Sean Wright said his rate nearly doubled during his last renewal. He said he has a pay-per-mile policy so it’s cheaper but still, his base rate doubled.
“I was upset, I called them twice, they were closed that day,” Wright said. “But at the end of the day I was like it’s cheaper than what I’m going to get with like Geico, so we gotta accept it.”
An analysis from earlier this year by Bankrate found the average driver in Phoenix is paying $300 more this year for car insurance than last year.
“I mean, it’s frustrating everybody in every corner of the nation because, you know, auto insurance is something that the government requires us to buy,” said Douglas Heller, Director of Insurance for the Consumer Federation of America, a nonprofit that works with consumer protection organizations.
Heller said rates are high because of how inflation has affected car repairs.
“But also unfortunately the insurance industry, which is supposed to be really well-regulated is not particularly well-regulated, and I think the insurance companies are getting away with pushing rates up higher than are appropriate,” Heller said.
In Arizona, insurance companies don’t need approval from the state to change their rates. Rate changes are submitted to the Arizona Department of Insurance and Financial Institutions. As long as rate increases are justified and there’s competition in the market, insurance companies can charge it.
Bob Passmore, department vice president of policy, research and international at the American Property Casualty Insurance Association said increasing technology in cars like brake assistance and increasing used car values are factors in insurance premiums.
“Insurers get it on both ends: They’re paying more for actually repaired vehicles and for vehicles that can’t be repaired,” Passmore said. “And there’s a lot of costs associated with collision repair that are going up as well.”
Both Passmore and Heller recommend drivers shop around for the best deal.
“If you are working from home part-time now, they may still be charging you as though you drive 15,000 miles a year,” Heller said. “And you rates can come down if you get the right things like mileage.”
“Even if your driving record isn’t the best, there’s usually multiple companies out there that want to write your business,” Passmore said.
Heller also recommends making sure your information is current with your insurer, and if you have an old car, check if comprehensive and collision coverage is really needed.
“Is it worth buying coverage to replace a vehicle that’s not worth that much more than the premium you’re paying?” Heller said.