Rising auto insurance costs lead some to take potentially pricey risks
DALLAS (CBSDFW.COM) – Along with everything else that's costing more these days, add auto insurance to the list. And if you haven't looked closely at your recent renewal, you should – some customers are being hit with 20%, 30%, even 50% increases.
"It's across the board," says Mark Walker Jr, owner of Walker Autobody and Frame in South Dallas. So, you could say that he's a middleman in the process and can agree that insurance companies are paying more to repair vehicles.
"Outrageous," he admits. "We're fixing cars now every day that cost $10,000, $15,000 and $20,000."
He says insurance company claim costs are increasing, because so are his costs – mainly for paint, parts and people.
"Every one of these guys," and he gestures to his busy shop, "This week, I just had to give all of these guys a raise."
Now. Back to those premium increases. He says he now quite often encounters customers who are opting for a risky alternative to combat rising premium costs – reducing coverage.
"Nobody ever expects to be involved in a car accident," says Walker. "That's why it's called an accident."
He points to one vehicle back in the shop for a second time in four months.
"Neither accident was his fault... unfortunately the person didn't have insurance and he's stuck filing a claim on his own policy."
And he's lucky to have that option. Some fully insured customers are opting to pay for repairs out of pocket – declining to file claims for fear of future premium hikes or getting cancelled altogether.
"A woman was in here just a couple of hours ago," shares Walker. "The cost to fix her car was over $5,000. I said, 'ma'am why don't you file an insurance claim?' She said, 'Mr. Walker, you don't understand. I already talked to them. They'll probably go up 30-40%'."
So, are there other options to just paying the higher premium prices?
Experts say customers should consider:
- Raising deductibles
- Bundle with other lines of insurance, such as home, renter's or even life, to get bigger discounts
- Maintain a good driving record and good credit
- Teen driver? Be smart in the kind of vehicle you buy. Some models can cost 10-20% more to insure.
- Shop around. But too much policy switching works against you.
- Make 'liability only' coverage a last resort
"You're taking a huge risk," warns Walker, "Especially if you're in a newer vehicle. At least try to get the liability with uninsured motorists."
Because right now even a 'fender bender' can break the bank.
"You're buying a headlight?
Over $1,000 dollars. Minor repairs are going to cost you $2,000-$3,000 easy."
