In what universe would Auto Insurance in Los Angeles CA go down? Isn’t auto insurance one of those things that just keeps going up. After all, we have seen prices rise no matter if there is a good or bad economy, if the interest rates and inflation are high or low, so why would insurance rates be going down now?
Why Are They Always Going Up?
By this point, the only conclusion is that auto insurance companies keep putting their prices up every year because they can. They go up every year if inflation is high and if it is low. They go up if interest rates are high or low. It also doesn’t seem to matter what the economy looks like either.
During the Trump presidency, the US economy saw its strongest level of stability since the Reagan era, and insurance rates still went up each year. During the Bush jr presidency, when the economy was floundering and then the banker’s debt bubble recession kicked in, the auto insurance companies still put their prices up every year. Auto insurance companies always find a way or reason to put up their prices, so why are they starting to lower them now? What has changed?
Why Are Prices Going Down Now?
There are two reasons. The first is due to the 2020 pandemic, and the second is due to the very high costs of fuel. For both of these reasons, auto insurance companies have made enough profit to lower their prices without it damaging their profits and/or their share prices.
Since Joe Biden was elected president and stopped the oil pipeline, the cost of fuel has risen dramatically. Then if that were not enough, sanctions on Russia and various oil cut-offs around the world have made fuel even more expensive. Since people are driving around a lot less and haulage companies are going out of business, insurance companies are paying fewer claims and so can easily lower their prices without it affecting their profit margins.
A similar case exists due to the 2020 pandemic. During the lockdown periods, people were still paying for auto insurance, but they were not driving around and making claims on their insurance. As a result, the auto insurance companies made a lot more profit than they normally do. Since they all have this spare profit kicking around, they are happy to lower their prices a little so they can push some of their smaller competitors out of business.
Will Prices Keep Going Down?
The fact that auto insurance prices are lower these days is just a temporary situation. At some point, Biden will be out of the office and the Russian war will be over, and fuel prices will return to normal. At some point, the massive amount of money made by insurance companies during the pandemic lockdowns will be spent up and the only place you will get lower prices is through smaller insurance companies.
If you want to reward the plucky nature of smaller firms, then the next time you go looking for auto Insurance in Los Angeles CA, then try Mona’s Insurance. Stick with the companies that always charge lower prices.