Why is the Cost of My Auto Insurance Always Increasing?

Three quick answers. Distraction, electronics and car materials.

Today we can’t live without our cell phones, they are, of course, our minicomputers. The thought of not reading an incoming text is almost unbearable. We hear that little beep, or the blast of music announcing the arrival of another text. We STOP everything, EXCEPT DRIVING, just to read the text. Driving at a speed of 60 miles per hour, you travel approximately 90 feet per second. A distraction of just 4 seconds will allow your vehicle to travel over the entire distance between home plate and the home run fence in most baseball parks. If you looked at your phone, you will miss the home run and have to wait for the instant replay, even though you only looked at your phone for a moment. But remember, there are NO replays when driving. Distracted driving is the number one cause of accidents today. Worse yet, you can be in an accident caused by a distracted driver, even though you were paying attention. Distracted driving is an epidemic.

Cars today are filled with electronics, most actually make your car safer, but what happens when you are involved in an accident? Cars built before 2005 had headlights that could be replaced by almost any individual, at a very low cost. Now headlights are sealed computerized compartments. Let something break that headlight and the cost to replace can run as high as $1,000. Compare this with older cars where the owner could replace the headlight for under $100. And sensors, they didn’t exist 20 year ago, now every car has them, driving up the cost of repairs.

Car Materials
I have an antique 1968 automobile that is actually made of steel. I also have a modern model of that same car that is entirely plastic and aluminum. The ‘68 steel bumper has been replaced on new models with a plastic (bumper??) which is filled with electronic gadgets. My ’68 recently rolled down a small incline and into a tree at about 5-10 miles per hour. The only damage was a slight cut TO THE TREE. No damage whatsoever to the ’68. Today let your modern car have that 5 to 10 miles per hour front end crash and the entire front of the car must be replaced, including all the electronics within the front plastic, which we call a bumper. In addition, it is very likely that your air bags will release. Now, no one is going to criticize the safety of air bags, but the exploding of one will disable your vehicle requiring a tow to the dealership and the repair bills begin. This minor accident will cost in the neighborhood of $2,000 to $3,000.

We all like the safety of air bags, we like the better gas mileage created by the lightweight body and the safety of the electronics, but the tradeoff is higher auto insurance premiums. Do we want to go back to the old days with AM radio and lower premiums? Of course not, so we must accept the premises that higher auto insurance premiums are here to stay.