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Auto Insurance Outlook 2025: Buckle Up For More Rate Increases
- Auto insurance rates are expected to continue to rise in 2025 due to spiking repair costs and claims frequency, as well as more drivers without insurance.
- Industry experts are split on whether or not auto insurance premiums will come down.
- Experts suggest consumers look to control costs of premiums through being a good driver or choosing policies with higher deductibles or claims-free or accident-free discounts.
- More than a dozen studies suggest that auto insurance rates have declined since 2024 due to fewer people driving during the pandemic.
- Several ways to save on car insurance are bundling policies for multi-line discounts, shopping around once per year, asking about available discounts and maintaining good credit.
- AI-powered risk analysis models are increasingly being used for better underwriting and claims management.
- New regulations and stricter penalties may be required to discourage driving without insurance to reverse the trend towards a higher rate of uninsured motorists.
- Innovative auto insurers tend to attract new customers, grow faster, and spend less on claims than their less innovative competitors.
- While there are potential savings for consumers, it is still ultimately up to auto insurers to find ways to lower costs and give consumers some relief.
- Consumers can also benefit from maintaining a good driving record and high credit scores, as auto insurers often take these factors into consideration when pricing policies.
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