Current Car Insurance Rates Climb

Car insurance companies claim the payments they're paying out are also on the rise. Like so many sectors of the economy, tough times mean higher prices. That is exactly what drivers and insurers alike are being faced with.

An increase in fraud during the economic downturn is another culprit of higher car insurance rates. Since last summer, the number of fraudulent claims has risen nationwide. Drivers desperate for cash have been known to torch cars, dump them in rivers and lakes, and even park them in the path of oncoming hurricanes. The rise in fraud comes despite a nationwide drop in auto theft.

Georgia and Florida are two states where drivers were likely to open statements and see a rise in rates. Drivers in the Sunshine state faced a 4% increase as of May, though Florida still has rates below the national average. Cheap car insurance will be something of the past, at least for sometime as the U.S. economy struggles along.

Loss on principle in outside investments have, like for many, harmed car insurers' bottom lines. With Wall Street numbers well below levels from recent years car insurance companies are forced to make up the losses elsewhere. Companies often use investments to cut costs for consumers, the downturn and subsequent losses are now being passed down the line.

With many Americans facing tougher economic times, drivers are putting off more and more elective services for their vehicles. This means lower sales for parts producers and thus higher prices on many of their goods. Service centers are in similar situations, also helping to push auto insurance rates higher.

Drivers are encouraged to shop around for the best current car insurance rates. Most states have dozens of companies from which to purchase coverage. While many of the rates are similar due to the fact they are based on driver-population data, doing your homework can help find the lowest car insurance rates. As always, drivers are encouraged to drive as safe as possible to avoid the worst culprits for higher rates, speeding citations and wrecks.