Does inflation affect car insurance? What you need to know

“Why is everything so expensive?”

“&%$! That was two dollars cheaper last month!” 

“Hey Siri, where can I find the

cheapest gas?”

Inflation feels like it’s everywhere in 2022—at the grocery store, the gas pump, your local car dealership, your rent, upcoming flights…the list goes on. One area you may not have expected inflation to impact? Your car insurance premium.

Inflation can affect car insurance premiums and lead to rising rates. An article by Digital Insurance referenced a 2022 J.D. Power and TransUnion study that found insurance quotes have jumped 11.8 percent with 3.8 percent of consumers switching insurers. What’s causing this jump in price? We’ll answer questions on the topic of inflation, how it may affect your car insurance premium and why telematics may be the key to keeping more money in your wallet.

How inflation has affected the car insurance industry

Car insurance rates can change for a number of different reasons—the type of vehicle you drive, your driving history and even economic changes. With inflation becoming a reality for most in 2022, we want to help clarify how inflation is affecting the car insurance industry. 

A lot of us are paying attention to the cost of insurance these days. Insurance companies are paying attention too. Here are three areas impacted by inflation that insurers may take into consideration when increasing rates:

• Cost of vehicle parts and repairs

• Increased cost of new vehicles 

• Rising cost of medical expenses

It’s never a bad idea to dive a little deeper into why car insurance rates have gone up, but it doesn’t change the reality that you might be paying more than you expected for car insurance. So before you think not having insurance is easier on your wallet, let’s share with you how you can have the best of both worlds—great insurance coverage and a low rate. 

How telematics technology can help save money on car insurance

A May 2022 report from TransUnion found that in the past six months 39 percent of consumers are shopping for insurance with 21 percent of them switching their existing insurance provider. 

With inflation being one of the key drivers behind these percentages, folks are looking for ways to save and lower their car insurance premiums—including the consideration of adopting new technologies. 

One of these upcoming technologies is telematics. In the same report, nearly 33 percent more consumers opted in for telematics-based car insurance, with hopes of lowering their premiums through safe driving practices.

“It’s clear that high inflation levels are impacting consumer wallets…In the insurance industry, more consumers are warming to the idea of using a telematics tool to enhance safe driving while also lowering costs.” 

– Michelle Jackson, senior director of TransUnion’s personal property and casualty insurance business

Tech-savvy or not, the term telematics may feel a little complicated. Telematics is basically using mobile technology to see what a vehicle is doing on the road. You can kind of think of it as a fitness tracker for driving. 

As a behavior-based auto insurance company, HiRoad uses telematics technology to understand your driving habits and reward you for your good driving every month (up to 50% off your insurance bill every month). This is great news if you’re a safe driver because it means you can finally get recognized for being someone who makes the road a better place to be. 

As you shop for car insurers with a telematics option, consider the whole picture. Because even though savings (especially during inflation) are a big bonus, make sure you consider things like customer service experience and coverage options.

Insurance coverage during inflation

Having enough coverage is an essential part of your car insurance policy, and reviewing those coverages from time to time is important. When would you want to review your policy coverages?

You might want to evaluate your car insurance coverages before policy renewal, a move or during an economic change, like inflation. Inflation has influenced the price on new and used vehicles, car repairs, car parts and more. These factors are good to keep in mind as you assess your own coverages. The last thing you’d want to see happen is to not have enough coverage in the event of an accident. 

The good news? At HiRoad, you don’t have to sacrifice coverage for savings. You can have the best of both worlds, with the added bonus of a great customer service experience—just take a look at our reviews. 

Ways to save with HiRoad insurance

Inflation may be weighing heavily on some minds right now, and that may be influencing where you can cut costs. Here’s your reminder that car insurance in most states is a need, not a want (please don’t drive without insurance). Saving on your car insurance without sacrificing coverage starts here, with HiRoad. 

As an insurer that utilizes telematics, our behavior-based insurance allows you to be in control of your savings. By driving with the HiRoad app, you’ll get feedback in the form of four Driving Scores: 

• Distraction free. This score is all about planning ahead and not touching your phone as you drive.

• Driving patterns. How much, where and when you drive can impact your risk for accidents.

• Safe speeds. This covers how driving at safe speeds decreases your risk for incidents and accidents.

• Smooth driving. Going smooth around corners, slowing your roll at a stop sign and slowly accelerating is what’s covered in this score.

The more mindfully you drive, the higher your scores. The higher your scores, the lower your payments can be. How low? Up to 50% savings, with many [HiRoad customers] saving $70 each month*. If you’re big on savings

and someone who does the mindful thing while driving, join HiRoad and start a quote today. 

The information in this article was obtained from various sources not associated with HiRoad®. While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. HiRoad is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. HiRoad makes no guarantees of results from use of this information.

*Based on average monthly discounts off of base rate in Rhode Island and Arizona between 10/1/2020 and 9/30/2021, determined by driving scores of users logging trips using the HiRoad App.