LISTEN: Get Gephardt: What’s fueling the dramatic increases in auto insurance premiums?

ST. GEORGE, Utah — Trisha Madsen couldn’t believe her eyes when she opened the latest invoice from her car insurance company.

 

 “They have doubled the premium on me.”

Instead of paying $696, they want $1,270. The kicker: Madsen has a perfect driving record. No accidents. No claims. So, why is there a spike in her rate? Madsen said her insurer told her costs are just up.

“To double them is quite a deal!” she said.

Madsen said she called other insurance carriers and they all want to charge as much or even more. So, she called to find the answer to: “What gives?

“That’s kinda why I’m reaching out,” she said. “I don’t want this to happen to a lot of people.”

It is happening to just about everyone.

“Rates are up all over the country, too,” says WalletHub editor, Christie Matherne. 

She explained that this spike is largely a function of rates returning to normal. During the pandemic, hardly anyone was driving. It got to the point where insurance companies had such a surplus of money that they began mailing rebates to drivers. That’s all over now.

“The rates are returning to their former glory, so to speak,” Matherne said.

However, a return to normal isn’t the only explanation. Rates are also more expensive thanks to everything from cars being more expensive to repairs taking longer due to supply chain issues and increased demand for repair work as more people choose to hold onto their old cars instead of replacing them. The longer repair wait times mean insurance carriers are having to pay out more for rental cars after wrecks.

Read the full story on KSL TV.