How To Defeat BRUTAL Rising Car Insurance Costs!

Have you seen your insurance bill for your car this year? Yes, it's absolutely staggering. Prices are going through the roof. But the question has to be asked, why are insurance rates going up so high? And how can you actually fix that? How can you mitigate? How can you reduce the cost of high insurance rates on your car? Let's get into it. I'm going to take this from the top. The first major reason why insurance prices are going through the roof has to do with car theft. Yes, that's on the rise. Eight billion dollars last year were contributed directly to the cost increases that we're seeing in insurance in the United States. In Canada, we've seen increases by about as much as 1.5 billion dollars. We know certain cities have a higher probability with car theft. A lot of these vehicles are getting stolen, shipped off onto a sea can and overseas it goes. It's just that easy. And it appears that the authorities are challenged with trying to mitigate these automotive thefts in Canada. United States absolutely seeing the same kind of issue. Now, according to National Highway Transportation Safety Administration, we're seeing up an increase of 25% of the automotive thefts this year over years previous. And on top of that, if you really quantify it, that's one vehicle stolen across the country every 30 seconds, means that clearly there's a real problem here. And unfortunately, all these automotive thefts are taking a real toll on insurance companies, which who now have to pass those costs down to the consumer. As somebody's got to pay for this, some money's got to come from somewhere. And it's ultimately going to be out of your and my pocket. And before I dive into how to share some of those plans and mitigate and reduce your insurance costs or reduce having the likeliness of your vehicle getting stolen, just know that there's some vehicles with a much higher probability of getting stolen. For example, I know a personal friend of mine, his vehicle, which looked a lot like this vehicle right here, was stolen in the night. And according to security cameras, they were there less than 30 seconds in, popped out, and they basically took his vehicle in the middle of the night. We know there's a lot of popular vehicles, Lexus, Toyotas, that are both easy to thief as well as relatively profitable. And a lot of these thieves know it. They know how to get in, and they have all the tricks and the tips. So one of the biggest tactics in avoiding getting your vehicle stolen, which of course translates into increased insurance costs, and making that claim has to do with mitigating it in the first place. Prevent the theft of that vehicle. Can you use the club? How about a Denver boot? How about some other immobilizer that you can use to prevent it from starting? Talk to your insurance company, and they can often provide you some guidance as to how to mitigate it, some of the best tools, and the tips, and the tricks. For example, a Faraday's cage might work. Putting your keys well away so their proximity sensors don't pick it up, or the thieves allow to grab it. There's lots of tips and tricks, but at the end of the day, if you can reduce the amount of vehicles that are stolen, there's a good possibility we may start to see insurance costs level out. And accidents like that are another leading contributor to insurance rates climbing through the roof. And accidents have drastically climbed since everybody came back. 2020, everybody stayed at home. Shortly thereafter, within the next year, everybody started to get back in the saddle, started heading back into work. We have more people coming into the country. The country's population is growing, and more people are on the road. Of course, we're seeing more and more performance cars, higher performance, faster cars, more SUVs that don't necessarily stop all that well. Even with all this technology, people rely on that way too much. And unfortunately, even with little collisions, relying on the cameras, backup cameras, even some of the fender benders you're getting into in parking lots are laying down the claims. A lot of the technology, people are relying on too much of the tech, and not enough of this. And of course, mental health issues. People are struggling right now. Cost of living is hitting everybody really hard. There's always somebody with something on their mind. There's more distractions, too much technology, fast cars. That's leading to an increase in distracted driving. Of course, cell phones, social media, and the like. And people are watching TV while they drive. People are texting while they drive. And all these other distractions are causing extra accidents. And unfortunately, those lead to claims, which you and I are paying for. So before we tackle the next one, it does make you wonder, and I'm sure a lot of you are wondering, well, when everybody was sitting at home during 2020, our insurance rates didn't drop then. Why do they not pass the savings off to the customer? Why do they not pass us the extra money that we are putting into the system if nobody's making claims because everybody's sitting at home? Well, that's a great question. And what that does is usually there's a bit of a backlog. And from people in the industry I've spoke of is, they're still busy paying claims from the year two, three years before when there's lawsuits. And that's the big one. Lawsuits are one of the key elements as to why insurance claims are going up. People are claiming a lot of injuries, and of course, a lot of those problems like that. You get a fender bender, and all of a sudden, the soft tissue issue becomes a problem. And now, naturally, insurance companies were paying out. Well, now there's task force. There's people at the insurance company level that are monitoring and are scrutinizing every single claim to make sure that it's not just a soft tissue injury. They want to try to get people back into their vehicle, restore it back as best as possible, and get people up and as healthy as they were prior to the accident. But that's all they're trying to do. And at the unfortunate reality, there's a lot of people making these claims of injuries and all these soft tissue injuries, claiming that they're a lot more injured than they are. So it's a lot of these false claims leads into another issue. Insurance fraud. Yes, insurance fraud is a big one. People saying it's worse than it is. People faking injuries. People faking accidents. People staging an accident. Setting this car up for that up car and back into the other one. Staging it. There's people doing that. And unfortunately, insurance companies are getting wiser to that. They're asking more questions. They may actually quiz you a lot harder when you're making that claim. Why did that happen? How did it happen? Where were you? What's the police report look like? That's what's going on. There's a lot more fraud these days. People trying to say something happened when it didn't, or even more importantly, staging it and trying to be intentional about making that claim. We also can't forget about cyber attacks. There's going on everywhere. Cyber attacks are causing a lot of additional cost to insurance companies and everybody. It's a huge loss for everybody. The entire industry. CDK. We saw even the automotive industry and all the dealers were actually shut down this summer because the cyber attack on their system and they actually had to pay a ransom. And that's costing insurance companies more money. Sometimes they're paying ransoms. Sometimes it's just costing them money. Whatever it is, there's extra money just going out of the system. Sadly, you and I are paying for that too. You look at some of the older vehicles as the next reason. I mean the older vehicles had some basic plastic and a very sturdy bumper, but generally a very simplistic setup. Very easy to fix. Then we look at some of the new vehicles like these right here. And that's what we're talking about are vehicles that are much more expensive and much more complex to fix. And that's one of the bigger challenges. Whereas that used to be maybe a $700, $800 fix. Now when you're having a front-end collision on a vehicle like this, just take a look around. You've got these expensive headlights. This headlight here is worth $4,000. You have headlight washers. More equipment there. You've got sensors. More equipment there. You've got one little detail. Another expensive light fixture. More detail here. More detail. These decals here end up costing you another $300, $400. You of course have cameras right there. You've got a whole pile of sensors. Not to mention all these complex pieces and parts that make up modern-day bumpers and fenders. Obviously extra fenders. Very complex. Extra parts. It's not just one fender anymore. You have all of these multitude of different textures and fenders and electronics and technology. Whereas the old tech might have cost you that under $1,000 to fix. Now you've got all these sensors and bumpers and pieces and you have to spray everything differently. This can be $3,000, $4,000, $5,000 repair if you don't include a headlight. If you wreck a headlight and the entire front end, this could be a $15,000 to $20,000 repair if you take out the two headlights and you have to replace the front end. That's how expensive these repairs are getting and that's why it's the sheer complexity. We even think of vehicles like Tesla. We've heard the stories. $40,000, $50,000, $60,000 for a battery swap because they were nicked. Maybe they drove over a piece of pipe or got into a minor collision. Even a relatively minor accident is enough sometimes to slightly damage the battery and force the insurance companies to write that vehicle off due to safety reasons. So now you have these vehicles with far more complexity immersed in their hybrid systems. All these complex technology, the bumpers, the bodywork is much more advanced, much more intricate, much more sensors, batteries, and all of these new parts and new vehicles went in the same collision of a vehicle from say 15 or 20 years ago now end up might cost you 100, 500, 1,000% more than some of the older vehicles and now insurance prices have to go up. These companies are paying the piper. So of course when we have a vehicle that's stolen or we have a vehicle in a collision, we have an accident history, somebody injured, fraud, you name it. There's a whole pile of reasons why now people are paying more for insurance than they've ever had and it continues to go up because of increased numbers of claims. Again, I already said we're seeing 20 to 30% increase by the end of 2024, which should add up to another significant increase in your bottom line when you're paying your insurance bill next year. Okay, so you want to get down to the bottom of this. How can you save some money? Well, there's the obvious administrative functions. If you have a vehicle existing and you don't necessarily want to change the vehicle you're driving, then you definitely want to shop around. Never remain loyal to insurance companies because they rarely are loyal to you. So at the end of the day, if you feel like your prices have been edging up, shop around. Look at other insurance companies. Make sure you grab a screen grab of what you're using for the different levels of coverages and make sure you take that to another insurance company. Do a couple of them and find out. Make sure that you can do a check and balance. Make sure that you're happy with the rate. Another factor is with your existing insurance company, if you're happy with them, make sure you validate the ratings. Your driver rating can change. It's been going through different changes and been scrutinized in the last year or two and so there may have been changes and shifted. You might have been bumped up to a higher level. Make sure you check that everything's accurate and that you're not overpaying there either. Another factor I like to think about and I keep myself in check with this is do you need all that relevant coverage? Now it doesn't mean you do more with less, but clearly this is another case of shrinkflation at work. Now we know that some vehicles are very expensive to replace and I know of some people that have extraordinarily expensive vehicles and they just cover it for loss. So they go with a high deductible and everything else is basically a wash. But basically what I would suggest is look at your vehicle. If it's an older vehicle and it's a standard sheet of glass, do you need glass coverage for that? Or if you have a newer model vehicle like this, do you have heads-up display like you see right in here? Heads-up display means that you've got a special windshield with a special coating and that's going to be a very expensive sheet of glass to replace. So depending on the vehicle you have, the type of recovery you need, do you care about dent protection? Do you care about gap insurance if it's an older vehicle like this and you don't owe the bank anything? Do you care about glass coverage when you can replace this for 250 bucks? This one here might cost you three grand. Make sure you know the vehicle you have and cover it appropriately. Don't get lazy on that. Make sure, do you care about your wheels if they're all scuffed and banged up already? Or do you want to protect them? You might look at that extra coverage. Do you need collision coverage? Collisions, great. If you're a little bit careless, if you tend to bang off the sides of trees or possibly hit curbs, then you might want to have collision coverage. It also protects you from you doing you harm. Now, of course, liability is a standard. You have to have that in case you hit somebody else and you hurt them. That's a legality. You definitely have to owe a pony up for that. And I would suggest always having at least $2 million liability, but make sure you've matched the insurance coverage to the vehicle that you own or the way you particularly drive. And also, as I mentioned earlier, talk to your insurance company. If you've got a vehicle like this, try to understand how you can protect yourself. We know these vehicles are easier to thieve than many others. Unfortunately, talk to the insurance company. Understand what customers have been typically doing. They'll give you some feedback because insurance will give you the right information. They don't want you to make a claim, so they'll try to help you as best they can. Make sure that you have the information. Do you need a starter shutoff or a battery disconnect if that vehicle sits for a long time? Immobilizers, there's a lot of technology. Again, I mentioned Faraday's cage. Make sure you keep your proximity sensor. A lot of the key fobs now emit and receive signals, so if you hide them in a steel box or a Faraday's cage, that might eliminate the possibility of a thief finding and tracking your key fob to get them into your vehicle. So make sure you do all those odds and sods. Make sure you cover it effectively. Park in well-lit areas, of course, at night, or even better, park it inside a garage that's locked up and secure. Never leave keys in the dashboard. Never leave those overhead garage door openers in the dashboard. Hide all of those things out of sight, out of mind, and even your vehicle. If you're parking it in a parking mall or some other public area, don't leave a reason. Don't give these people a reason to break in. Don't leave change in the dash. Don't leave cigarettes or anything else that looks valuable in the vehicle because that just gives them a reason to get in. Now granted, those aren't the hardened thieves. Those are the people breaking your window and usually just stealing the change or the cigarettes, but that's still a claim because a side window on that car might cost you 700 bucks. So you have to go to the insurance company. You might have a $500 deductible. You might pay it all out of pocket. Everybody loses except for the thief who's got his $1.85 in change. So at the end of the day, do all of those things and you can help yourself. But let's just say you're in the market for shopping. There's other things that you can do to mitigate that as well and high insurance rates and that instead of maybe buying your beautiful luxury vehicle that you've been shopping all along for, you might actually step down and buy yourself something that's older, used, less luxurious, and the components are often a lot cheaper to replace if something happens. If it gets in a collision or if it's stolen, it's less likely to have a problem in replacing parts or at least for a lot less money. And if you really want to get down to the cheap, you can get the cheapest vehicle that you can possibly find. You know, a vehicle like this one or a vehicle like this one and go ultra frugal. Keep your costs down on the vehicle and of course insurance costs are naturally lower on those. You can reduce the type of coverage that you put on these vehicles as well and it's going to save you a ton of money. If you're not fussy and you just want to get around or you need a cheap transportation to get to and from work, maybe look at the frugal approach. That's going to save you all kinds of money, not just on the vehicle, maybe on the repairs and definitely on the insurance. So let's just say you found a great vehicle with low cost of insurance. Be sure to check out that because you don't want to make sure you buy a vehicle with one of the worst engines in it because that could cost you dearly too. Hope to see each and every one in the next one. See you real soon. Bye-bye.