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Why experts say your auto insurance cost may be going up

According to Bankrate, the average annual premium for auto insurance in Maine in 2023 went up about $65 compared to 2022.

GORHAM, Maine — For Shawn Moody, founder of Moody's Collision Centers, the impact of the pandemic isn't as distant a memory as he would like it to be. Spiked costs for auto parts and a labor shortage still exist to some extent, and they're causing some challenges at his auto body repair shops.

"Our customers are more frustrated by the timeline. The wait times have extended themselves out," Moody said.

There's also another issue now coming into view: Auto insurance rates in most states (including Maine) have risen in 2023 compared to 2022.

“Because the costs have gone up, insurance companies now are going to the [Maine Bureau of Insurance] to say, ‘Hey, we’ve got to go up on our rates,'" Moody said. "Unfortunately, that’s when consumers are going to feel the impact.”

According to Bankrate, the average annual auto insurance premium in 2023 in Maine is $941, up about $65 dollars from 2022. The good news: Even with that increase, Maine has the lowest average premium of all 50 states, according to that list. 

"The thing with insurance is everything is historical," Bob O'Brien, principal at Noyes Hall & Allen Insurance, said. "What happened two years ago is what affects your insurance rates now.”

O'Brien said for the most part, it seems like clients with his agency are keeping their coverage, although some people are opting for higher deductibles. 

"It’s complicated because the fastest way to reduce your premium is to reduce your coverage, and every time you reduce your coverage, then you’re exposing your assets," O'Brien said, later adding, "It’s kind of a wash. You’re really kind of rolling the dice.”

O'Brien said when an insurance company files for a rate, they must show their premium and losses to the Maine Bureau of Insurance and explain why they need to make an adjustment to their rates. The bureau says it will object to a company's rates if they are "excessive, inadequate, [or] unfairly discriminatory."

"There is some consumer protection," O'Brien said.

O'Brien said insurance rates happen in cycles. Unfortunately, he said he doesn't expect costs to go back down any time soon. You can click here for tips about buying auto insurance. 

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