Many have expressed concerns over a recent phenomenon of their car insurance having a steep increase in premium cost over the summer. Researchers looked into the issue, trying to find the reason for such a dramatic change, with some expressing that they saw an increase of $100 or more. While some are brushing off the increases as normal signs of inflation, stating that “everything goes up,” others search for a deeper seated explanation into the issue. According to the insurance marketplace researching company, Insurify, part of the reason can be explained away by inflation; however, there are a few other culprits that can be blamed.
One such explanation per Insurify is that there has been an increase in auto thefts.
In 2023, California came out on top of the auto theft ranking. In a state in which auto thefts are at a record high, insurance companies do not feel safe leaving customers paying low rates. Companies have expressed that because they have to pay out a certain amount if a vehicle were to be stolen, they feel obligated to charge a certain amount to remain covered. This is incredibly unfortunate to the consumers as there is not much, if anything at all, that one can do to prevent a theft. Some explain that they feel that this is them having to pay for a crime that they are not committing nor know if it will be committed against them.
Additionally, California has strict insurance regulations that are backfiring against the average Californian car owner.
The regulations that California has put in place for the insurance plans are meant to protect the drivers and car owners, but instead Insurify reports that they are partially to blame for the price spike. Because of the regulations, many companies have pulled out of California and are refusing to provide coverage in the state. This leaves a more limited pool of insurers available, which allows for less restriction in competitive pricing, as companies can charge higher premiums since everyone needs insurance to legally be on the road.
Ultimately, California drivers are stuck between a rock and a hard place. At this point, there are few options remaining for the people to do aside from putting pressure on the lawmakers in the Department of Insurance to find ways to pressure and/or work with insurance companies to bring down premiums.