By Jimmy Fay Insurance Agency, Inc., a State Farm Agency
If you are like most people, rising prices have made a big impact on your life and your decisions. If you haven’t experienced this yet from insurance, keep an eye out for your renewal notice, BUT are your rates really going through the roof?
To discuss the recent changes, we need to do a quick dive into what auto insurance is and why you have it. The purpose of all insurance is to make you “whole” after a covered loss happens. Basically, this means that insurance is designed to be used to protect you from the unexpected and provide financial support to restore your life to the way it was before the incident.
In general, the main thing covered on your auto policy is your financial liability and uninsured/underinsured liability. If you are found liable in an accident your liability limits need to be high enough to cover all damages, or in the case of uninsured/underinsured accidents, the damage done to you from someone who doesn’t have enough insurance. This coverage protects you from judgments against you, your assets and your income. Various coverages are available to add to your policy, and there is a great resource on the Virginia State Corporation Commission’s website.
When the pandemic happened, the number of cars on the road drastically decreased and led most insurance companies to reduce pricing. Fewer cars meant fewer accidents, and that meant fewer paid claims. Every major company provided reduced rates to help during the shutdown, but when everything opened up, prices didn’t return to normal. In fact, some companies were collecting the same premiums in December 2022 as they did in December of 2019; however, the cost of parts and labor had adjusted to the post pandemic world.
To remedy this, insurance companies need to increase their premiums, reduce risks or reduce expenses. As you can imagine, the way this is being done is different from company to company. Some even went so far as to stop insuring in certain states.
In addition to the industry adjustments, Virginia has changed the minimum required limits.1 One went into effect already and the next will take place January 2025. Virginia has also changed uninsured/underinsured coverage2 to help add more protection to your policy. The landscape is evolving, and for insurance companies to stay in business, prices must increase to match the current risks they insure. But that doesn’t mean you should pay more than your share. You have options to make sure you and your family are secure and to reduce your costs.
You really have a choice when it comes to auto insurance, and with a little help you can be confident in your protection and price. The first thing to understand with insurance is that your agent needs to know you; the people we know the most are the people we can help the most.
You and everyone living at your address may affect your insurance. Do you have a child away at school, someone with good grades or an older driver who has taken a driving course? There are various discounts you could qualify for, and you may not even know it.
Every company is different. Some favor new customers and others favor tenure. Some other important considerations: can you qualify for multiple policy discounts, and are you with a stock or mutual insurance company?
When it comes to your car, remember expensive cars have expensive parts, so insurance costs will be higher. Policy limits, coverage options, deductibles and discount programs will affect your premium. Be sure you discuss your options with a licensed agent. There is no “one size fits all” when it comes to insurance. A licensed agent will help you find the best way to reduce costs for your family.
With changes in liability limits, companies recovering from the pandemic and life factors specific to you, there’s never been a better time to meet with your agent to find the best options to restore your peace of mind.
1. (SCC of Virginia)autoguide.pdf (virginia.gov)
2. (Code of Virginia, n.d.)Code of Virginia (2023 Updates)
Jimmy Fay is president of Jimmy Fay Insurance Agency, Inc., a State Farm agency, 11817 Canon Blvd., Suite 606, Newport News, VA 23606. He can be reached at Owner@JimmyFay.com, 757-874-8900, or www.JimmyFay.com.