Sky-high car insurance rates? Blame it on all the tech in our cars
My car insurance just went up 32%. Did I have an accident or get a few tickets? Nope. Across the U.S., the average full-coverage car insurance bill went up 25% last year. In some states, it was closer to 40%. Geez.
The main reason? Today’s high-tech vehicles cost way more to repair. You don’t need to own a high-tech car to feel the pinch, though; it’s hitting everyone.
Driving up costs
Modern cars are packed with dozens of sensors and endless lines of computer code. Combine that with the rising cost of replacement parts and repairs, and voila — soaring auto insurance rates.
No wonder the average collision insurance claim jumped 64% between 2018 and 2022. In 2023, auto insurance rates climbed 20%, the biggest increase since 1976.
The rate increases are slowing a bit, but there’s no telling how tariffs could impact that. About 60% of car parts used in repairs are imported from China.
Let’s look under the hood
In 2018, Toyota redesigned its uber-popular Camry. The number of parts in the front bumper alone increased from 18 to 43. Most are related to advanced driver-assist features.
The upgrades also mean a front-end collision repair is 43% more expensive. It’s not just driver-assist jacking up costs.
- Many new cars have LED headlights, which cost around five times more than halogen lights to replace.
- New cars contain more aluminum. Compared to steel, aluminum is lighter, provides better gas mileage and offers more protection in a crash, but it’s harder to fix and more expensive.
- EVs take 20 days on average to repair. That’s 40% longer than traditional vehicles and $500 more expensive for labor.
Smart ways to save
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Insurance rates are through the roof - and you can blame AI
There’s a good chance you’ve been hit with insurance rate hikes — and it’s not just you. Within the past year, about a third of us have been hit with increases to the tune of 17%.
Insurance companies blame it on rising costs for car parts, replacement cards and all those expensive claims.
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