Why are car insurance rates going up? | PEMCO

If you're someone who lives in Washington state or Oregon and has auto insurance, whether it's through PEMCO or another carrier, you might have seen a rate increase at your last renewal. And you might be asking, "What gives?"

We hear you.

Across the state—and across the country—most people are likely to see their auto insurance premiums go up during 2023 and 2024 after years of little to no increases. It’s a reality for all of us. Why? Here are some of the reasons: 

First, we know that claims requiring repairs now cost more money.  Due to supply chain shortages and labor shortages in many sectors, vehicles are taking longer to get fixed, and this means many customers must use a rental car for longer. We are also seeing increased cost of parts and labor. In fact, the cost of motor vehicle parts has risen over 20%. Finally, the cost of healthcare has gone up, with each bodily injury costing more to treat in hospitals, clinics, and therapy settings. 

Changes just don’t stop there. Cars are more complex these days, with more automated and high-tech devices in our vehicles than ever before. Plus, newer cars are built with higher quality materials (like Advanced High Strength Steel, or AHHS, for example). These advanced parts—while often making cars safer—cost more to replace.  And again, fixing them can take more time.

Drivers across the Northwest are all experiencing the same phenomenon. According to this recent article (based on a report by Value Penguin), Washington drivers will see the second biggest increase in car insurance premiums in the nation this year. State officials say it's the biggest increase that's been approved in years. This means *most* people will see their rates go up at some point...even those with clear driving records. 

We understand the frustration or confusion that may occur if you happen to see your premium rise this year. At PEMCO, our desire is to free our community to worry less and live more, and we want you to feel you are getting top value for your dollars spent, so your insurance can do what it's supposed to do: protect what matters most.

Here are a few things you can do to make sure you’re getting your best rate: 

• Practice safe driving. Did you know a speeding ticket in Washington State could add over $1800 to your yearly premium, on average? We encourage all drivers to leave for their destinations 10 minutes earlier than they think they need to, to ensure they do not feel rushed or pressured to drive fast. 

• Take a defensive driving course. PEMCO offers a defensive driving discount to all customers 55 and older who take this class. Talk to your PEMCO agent to apply for this discount. 

• Use PEMCODOMETER to unlock My Driving Discount.  My Driving Discount is powered by PEMCODOMETER through the PEMCO app. It runs silently in the background of your smartphone, monitoring your driving and tabulating the data for discount purposes only. Most drivers earn about a 10% discount on average. Here’s a quick video that explains how PEMCODOMETER works. 

• See if you’re eligible for any other discounts offered by PEMCO. 

Also, we want to remind you that at PEMCO, we don’t have stockholders. We’re a mutual, owned by our customers. This means every penny we earn goes back into making your policy as affordable and comprehensive as possible. We mean that. 

We encourage you to keep in mind that you’re entitled to a free policy review at any time. If interested, you can connect with a PEMCO agent to make sure you’re getting all the discounts you’re eligible for and the coverage that’s best for you. You can call us at 1-800-GO-PEMCO (1-800-467-3626) or log into your self-service account to manage your policy online.

We are proud to be your Northwest insurance carrier and rooted in our PNW communities since 1949.