New Mexico Car Insurance Got 34.1% More Expensive in 2023
#Mexico #Car #Insurance #Expensive
results about New Mexico Car Insurance Got 34.1% More Expensive in 2023
In 2022, the average cost of a full coverage auto policy in New Mexico was $1,449, according to data from Quadrant Information Systems. A year later, in 2023, that average premium has increased to $1,943. The 34.1% rise is the 10th highest of any state in the country.
Many of the factors that contributed to the rise in the state’s auto premiums were factors nationwide, such as general inflation. However, some of the reasons insurance rates jumped so much in the state were more specific to New Mexico.
Healthcare Costs Have Grown
Claims payouts are the single biggest expense for insurance companies, representing 70%-80% of auto insurers’ expenses in a given year. Medical claims are a significant portion of those payouts, meaning that increases in healthcare expenses result in increased payouts for individual medical claims.
Between December 2021 and December 2022, the consumer price index (CPI) for medical expenses increased by 4.5%, according to data from the U.S. Bureau of Labor Statistics (BLS). A 4.5% increase in healthcare costs can have a noticeable effect on a family’s budget. However, such an increase across the millions of auto insurance claims filed in a given year results in a massive rise in payouts for insurers.
The Cost of Car Repairs and Replacements Is Up
Another major contributor to claims payouts is property damage. Collisions and other sources of damage can result in a need for repairs, or in a total loss claim in which companies pay a policyholder for the total value of their vehicle. Over the last year, the cost of both auto repairs and the cost of vehicles themselves has gone up significantly.
According to data from the U.S. Bureau of Labor Statistics, the CPI of auto repairs and maintenance increased by 12%. That means that insurers saw a similar increase in per-accident payouts for claims-related repairs over that same period.
In addition, the price of used cars also increased substantially over the last year. Between January 2022 and January 2023, the used car CPI grew by 24.5%. When a car is totaled for any reason, drivers who have a full coverage policy typically receive a payout for their vehicle based on current market rates. That means that insurers paid more on average for each total loss claim, and sometimes more than the value of the vehicle when the policy began.
New Mexico Has More Car Thefts than Most States
Car theft is another common reason for auto insurance claims. A theft can cause a wide range of damages to a vehicle and may even result in it being totaled in a collision. If the car isn’t found, it is written off as a total loss. Therefore, higher rates of automobile theft translate into more risk — and more payouts — for insurers.
New Mexico has one of the highest rates of auto theft in the country. According to the National Insurance Crime Bureau (NCIB), New Mexico saw 475.5 car thefts per 100,000 residents in 2021. That rate is the fourth-highest of all states and the District of Columbia.
The risk of car theft is especially pronounced in the state’s major cities. Notably, Albuquerque has one of the highest automobile theft rates in the entire country. In 2021, Albuquerque saw 710.6 car thefts per 100,000 residents, which is 49.4% more than the already-high state average and enough to place it fourth of any city in the country.
Thank you for reading New Mexico Car Insurance Got 34.1% More Expensive in 2023