If you have purchased a new car lately, you may have noticed the increase in vehicle prices. If you’ve had a recent insurance claim, you may have also noticed a higher repair cost. In 2021, the increase in auto body repair prices continued above the rate of inflation, marking the largest year-on-year increase since 1982. Conner Insurance ensures customers have the right coverage to accommodate these rising costs, and we'll tell you how in this article.
Rising Auto Prices Compared To Inflation
An inflation comparison chart in CollisionWeek shows the relative percentage increase of bodywork, auto insurance, and the Consumer Price Index. The consumer price for auto body work has risen at a rate 0.7 percentage points higher than overall inflation. Auto insurance cost figures include coverages beyond just auto physical damage, too. You’ll also see an increase in medical coverage and bodily injury claims, largely due to the rise in health care costs we are seeing this year too.
What Coverage You Should Have
When discussing the rise in vehicle costs, an important coverage you should be considering is GAP insurance. GAP insurance covers the “GAP” or the additional amount you may owe your loan company in the event of a total loss. In many situations, insurance will cover the actual cash value of your totaled vehicle, but what about the amount you still owe to the bank?
Why GAP Insurance Is Important
Let's say for an example that your vehicle has $20,000 still owed to the bank, but your actual cash value at the time of a loss is $17,000. That means you are on the hook for the $3,000 still owed to pay the vehicle off in full. That is where GAP coverage provides the additional payout.
Know Your Numbers
GAP Insurance is normally offered to you by your loan company, but most insurance companies also offer this coverage too. It is very important to know the difference between “what you owe” and "what your car is worth,” as well as what your insurance company will pay out at the time of loss.
Call Today to Get the Coverage You Need
Rising costs, inflation, and supply-chain issues have all had a large impact on the insurance industry. At Conner Insurance, we help our customers stay up to date on these issues and make sure their assets are protected with the right coverage in the event of an accident. Contact us at (317) 808-7711 to speak to an advisor, get a quote, or schedule a consultation with one of our professionals. Located in central Indiana, we serve the entire state including Carmel, Westfield, Fishers, Indianapolis, and Brownsburg, but also provide insurance and benefits to all 50 states.