SACRAMENTO, Calif. — If the cost of your car insurance is going up, you’re not the only one. All across the state, drivers are facing higher premiums.
California is home to more than 27 million licensed drivers and many of them are seeing their auto insurance premium go up.
"It's ridiculous, they're going up like crazy," California driver Nick Stratakos said. "It's very hard to make a living here."
"Bought a new vehicle, compared it with a couple family members and friends on insurance, and it's much different than years ago," said Gabriel Rasmussen, another driver.
So what's driving up the costs?
"Every accident costs thousands of dollars, whereas there used to be smaller claims," said insurance expert Karl Susman, of Susman Insurance Agency.
He says the technology in today’s cars makes them more expensive to repair, adding to a rise in premiums.
"10 years ago, 15 years ago, you have a bumper that gets damaged, you go to the body shop, they'd say, ‘Well, we can knock out the bumper, rebuff it and you're fine. $200, $300 bucks,’" Susman said. "Now, that same accident, you hit that bumper: you have cameras, you have sensors, you have LiDAR, you have all sorts of high technology in it. On top of it, you can't just have anybody install it. They have to be licensed and trained special technicians to put this bumper on and adjust the cameras and get it all balanced just right. And on top of it, we still have shortages in trying to get these parts."
He says, during the pandemic, the California Department of Insurance effectively put a freeze on automotive insurance premium increases, to make life easier for consumers.
"Even though inflation was going up, we know there were labor shortages. We know there were parts shortages, we knew all that stuff. The premiums that we were paying were unchanged,” he said. "Well, now they're coming back. So we're feeling this boomerang effect, sort of playing catch-up to where premiums needed to be."
So what can we do?
First, since premiums are based, in part, on a driver’s record — drive safely, Susman said.
"Frequency of accidents is way up. It's almost double what it was prior to the pandemic. No idea why," he said.
Second, "don't put in a claim that you can afford to pay… You're going to end up paying a higher premium and you're going to end up eating through that money that you would have paid up front anyway."
Third, you can go with a higher deductible, just don’t go without insurance.
"We're in a transition period. Hold on to the policies you have, put them on auto pay, don't let them lapse, and standby — hopefully — for things to get better," Susman said.
This could also affect your rental car experience. Just last week, Reuters reported Hertz is selling some 20,000 electric vehicles from its U.S. rental fleet. The company says repairing damage to the high-tech vehicles is just too expensive. It’s opting for gas-powered vehicles instead. Hertz is selling most of the electric vehicles on its used car sale site for between about $19,000 and $42,000 dollars.
