Rising Auto Insurance Premiums

04/28/22 • 25 min

Costs seem to be rising for almost everything under the sun these days. Unfortunately, auto insurance rates are no exception. Today on MoneyWise, we’ll tell you why and offer you some tips on how to lower your premiums. So NerdWallet is reporting that car insurance premiums are expected to increase even though the number of claims was down last year. Blame it on the far-reaching effects of the pandemic that’s led to supply chain interruptions, the shortage of new and used cars and a spike in reckless driving. Another reason for higher premiums is that vehicles are more expensive than ever, and that means repairing them is more expensive, too. The cost of used cars and trucks has jumped 37-percent over last year, and the average cost for a new, non-luxury vehicle is now $43,000 according to the Bureau of Labor Statistics. Plus, new vehicles now come with all kinds of fancy new gadgets that cost a fortune to repair or replace, driving up premiums. These include systems that help you park, cameras and all types of sensors. Repair shops are also charging more these days, driving up insurance rates. Much of that is due to the rising cost of parts. So what might seem like minor accident damage may come with a hefty repair bill. There’s also a shortage of qualified auto mechanics, which is expected to continue in the years ahead. This is due in part to the increasing complexity of automobiles and the need for more and better training programs. And would you believe that the pandemic has also caused premiums to rise? Even as people began to drive less as work-from-home opportunities became more available, they also began to drive more recklessly. Accidents caused by distracted drivers have been on the rise for several years, largely due to folks looking at cell phones, and it’s not clear yet whether hands free laws are having the desired effect. The National Highway Traffic Safety Administration reports that distracted driving accounts for nearly 10-percent of fatal car accidents. Then came the pandemic, and reckless driving seemed to go into overdrive as folks began to speed more. Erie Insurance conducted a survey of 500 U.S. drivers that revealed 1 in 10 drivers were driving much faster than before the pandemic up to 20 miles per hour over the speed limit. Now you’ve got to be wondering why that’s the case. Why would the pandemic cause people to speed? The survey asked that question, and here are the top reasons that drivers gave: ● The roads weren’t congested, so drivers felt safe driving over the speed limit. ● It seemed like there was far less law enforcement out, so folks felt they weren’t likely to get a ticket. ● And even the empty roads were a good opportunity to see how fast my car could go. All of these factors are causing auto insurance rates to increase. So what can you do about it? HOW TO LOWER YOUR COST First, check with your insurance company to see if there are any discounts that you’re not aware of. Examples might be signing up for electronic billing and auto pay. Your insurer might also offer a discount for taking an online defensive driving court. If there’s a safe driver discount, you’ll definitely want to avoid getting a ticket. You can also increase your deductible. That will lower your premiums. Just be sure to keep the amount of your deductible in your emergency fund. If you’re driving an older car, you can drop comprehensive and collision coverage. But again, you’ll want to have enough in savings to replace your car if need be. And finally, shop around for lower rates with other insurers. They typically offer lower rates to new customers, then gradually increase them over the next several years. So switch to another company could save you some money. On today’s program, Rob also answers listener questions: ● Should you move a pension or roll it over into something like an IRA? ● How should you manage I-bonds and are they a good gift for grandchildren? ● Can you sell a home that’s in forbearance? RESOURCES MENTIONED ● Find a Certified Kingdom Advisor Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to [email protected]. Also, visit our website at MoneyWise.org where you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app. To support this ministry financially, visit: https://www.oneplace.com/donate/1085/29

Previous Episode

Stop Helping Adult Children

As parents, we always want to help our children. But at the same time, we don’t want to encourage our children to have a slack hand. That sometimes leads to tough decisions. We’ll talk about that today on MoneyWise. TO HELP OR NOT TO HELP? Some parents find great joy in helping their adult children financially, especially if a child has chosen a career field that doesn’t pay very well. It’s a joy that can be experienced while you’re still living, as opposed to leaving an inheritance. The problem is that many parents are willing to help their kids even to the point of their own detriment, even when it jeopardizes their retirement. A recent Bank of America survey showed that more than half of parents are sacrificing their own financial security for children who should be supporting themselves. More than 3 out of 4 parents said they provided at least some financial support to their kids when they left the nest. This inability to cut the financial umbilical cord can have a detrimental impact on both parents and children. The kids may begin to expect regular financial handouts and become dependent on them. So much for the joy of helping. And as that survey showed, many parents are likely to go beyond the occasional financial gift, creating a pattern that threatens their own financial security. Too much help can also jeopardize the parents’ marital relationship when one parent sees the need to put on the brakes, and the other wants to continue full speed ahead. In another survey by Bankrate, half of retired couples said they’d made or are making financial gifts to their kids that impacted their retirement savings. Sometimes this starts when the parents are in a strong place financially and they can easily afford helping their kids. But the recent pandemic showed that anyone’s income can be negatively affected by unforeseen circumstances. In an economic downturn, the kids may be expecting more help. At the same time, parents are less able to afford it. And many parents will be reluctant to share their financial difficulties with their children. The effects of unbridled giving to kids can have long term consequences. Not only can it prevent parents from saving enough for retirement, it may also condition the kids to expect a lifestyle they can’t afford. It may also lead them to make critical choices that inhibit their ability to earn more and become financially independent. All of this can also negatively impact the parent/child relationship. When financial support is expected, it’s often not appreciated. Parents may then resent being taken for granted. TIME TO PULL BACK? Now, you may know that you’ve been helping your adult children too much and enabling them to remain dependent, but you’re struggling with the idea of turning off the financial spigot. God’s Word has encouragement and advice: Proverbs 22:6 tells us, Train up a child in the way he should go; even when he is old he will not depart from it. It’s never too late to start teaching your children financial responsibility. And Proverbs 29:15 reads, The rod and reproof give wisdom, but a child left to himself brings shame to his mother. God wants and expects you to help your children achieve independence. In their book, Beyond Success and Failure: Ways to Self-Reliance and Maturity, Marguerite and Willard Beecher write that parents need to gain freedom from their children so that children can be free of their parents. The parent has to take the first step. They also maintain that parents shouldn’t do anything for a child that he or she might do for themselves and profit from it. So you may have a weaning process ahead of you. You might begin to give incrementally less to your adult but still dependent child or you can set a deadline when all financial help will stop. Either way, you’re likely to experience some bumps in the road, but the payoff will be worth it. Then, start putting the extra money you’ll have into your retirement account. When the day comes when you have to stop working, you’ll need it more than your children will. On today’s program, Rob also answers listener questions: ● Is it a good security practice to divide your money between multiple checking accounts? ● Can paying off loans cause your credit to drop? ● Would it be wise to extend the benefits of a whole life policy? Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to [email protected]. Also, visit our website at MoneyWise.org where you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app. To support this ministry financially, visit: https://www.oneplace.com/donate/1085/29

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Help For Ukraine

The Russian invasion of Ukraine has entered its third month with no end in sight, taking a heavy toll on the population. Many are asking how they can help. We’ll answer that question today on MoneyWise. The U.N. estimates that more than two million Ukrainians are now refugees as they flee the violence in their country. Mostly women, children and elderly men, they have a critical need for basic commodities. The National Christian Foundation has prepared a list of U.S based organizations mobilizing to provide that aid. These charities have already been approved to receive grants through NCF’s Giving Funds. We’ll talk about a handful of them here in no particular order. CHARITIES HELPING UKRAINIANS Aerial Recovery Group: This organization with former U.S. Military Special Operators now use their unique skills to assist people after natural and man-made disasters. They perform high-risk extractions of orphans and the most vulnerable who are in imminent danger from the Russian invasion and subsequent fighting. They’ve also set up a food and supply distribution network. That’s the Aerial Recovery Group. AmeriCares: They provide support for refugees and migrants and they have an an emergency response team in Poland to support health services for families affected by the escalating humanitarian crisis in Ukraine. Their experts are coordinating large-scale shipments of medicine and relief supplies and mobilizing emergency medical teams to help in hospitals inside Ukraine. That’s AmeriCares. International Rescue Committee: For nearly a century, this group has provided disaster relief around the world. That includes emergency aid, health and sanitation, and psychosocial support to refugees and migrants. On the ground in Poland, they’re providing emergency support for families fleeing Ukraine, including economic assistance, survival supplies, and protection services. That’s the International Rescue Committee. Medical Teams International: MTI provides life-saving medical care to people in crisis due to war or natural disasters. They provide care in frontline clinics, refugee camps, and remote villages. MTI says donations will allow them to coordinate with multiple partners to ship crucial medical supplies to Ukraine. That’s Medical Teams International. Mission to Ukraine: They’ve been working in that country for 25 years serving women facing crisis pregnancies and children with disabilities each year and sharing the gospel. With the Russian invasion they’re now providing food, medicine, diapers, heating oil, and emergency refugee resettlement and housing. That’s Mission to Ukraine. Samaritan’s Purse: Samaritan’s Purse has a major presence in Ukraine. They’ve set up an emergency field hospital there with an operating room, intensive care unit and pharmacy. They’ve staffed the mobile facility with doctors and nurses who see 100 patients a day. They’ve also supplied 100 tons of relief materials, including medical supplies, hygiene kits, winter coats, blankets, and other items to help those fleeing the escalating conflict. That’s Samaritan’s Purse. Project C.U.R.E: The world’s largest distributor of donated medical supplies, equipment, and services to doctors and nurses. In one week alone they shipped to Ukraine 10 tons of medical aid, including trauma supplies, airway kits, sutures, gloves, surgical gowns, and surgical supplies. That’s Project C.U.R.E. World Relief: They work with churches to provide food, shelter, and supplies to those in the most vulnerable situations. They’re helping to resettle Ukrainian refugees and providing assistance to those already in the U.S. who are desperately trying to reunite with their families. Many of these organizations are faith-based, providing not only basic human services, but also spreading the Gospel. Some are more keenly focused on sharing God’s Word, such as the American Bible Society. They’ve had a strong presence in Ukraine since the end of World War II. For the last decade, they’ve focused on expanding Bible-based trauma healing work in Ukraine. They’re now working close to the frontlines helping families who’ve lost loved ones and are searching for truth and comfort during the ongoing conflict. There are many more worthy organizations providing desperately needed help in Ukraine. We just couldn’t name them all. Again, you’ll find a more complete list here. On today’s program, Rob also answers listener questions: ● Does it make sense to sell a newly-built home? ● What is the best way to start investing on behalf of young pastors in training? ● What can a person do as a government employee to invest for the future? Remember, you can call in to ask your questions most days at (800) 525-7000 or email them to [email protected]. Also, visit our website at MoneyWise.org where you can connect with a MoneyWise Coach, join the MoneyWise Community, and even download the free MoneyWise app. To support this minis...