Have Your Car Repairs Seemed More Expensive Than Ever? Here’s Why!

As I’m sure you’re aware, costs are rising across all industries and labor shortages are accompanying them. Because of this, the rising repair costs and labor shortages are raising claim costs for auto insurers up to nearly 5% as of last March. This is more than double the average of 2.3% last seen in 2016-2019.

The collision industry is experiencing significant challenges due to a shortage of skilled technicians. According to the TechForce Foundation, this industry will face a shortage of approximately 20,000 technicians per year until 2030. This shortage has prompted an increase in wages as shops compete to attract and retain potential employees. However, the increased labor costs are directly passed on to customers through higher labor rates, with some shops reporting rate increases of 6%-9%.

Unfortunately, the impact of the labor shortage on auto insurance is even more severe, as rising rental car rates and longer repair times have led to increased costs for insurers.

The American Property Casualty Insurance Association (APCIA) has reported that “the combination of higher frequency and significantly higher auto repair and replacement costs has significantly impacted auto insurance rates.” Furthermore, the rising cost of vehicles exacerbates this issue, with new vehicle prices rising 11.8% in 2021- the largest increase since 1975, according to the APCIA. In contrast, used vehicle prices have soared to a record 37.3%.

The collision industry’s labor shortage is having far-reaching consequences, affecting not only shops and their customers but also auto insurance rates and the cost of vehicles. It’s a complex issue that requires a multi-faceted approach to resolve, including attracting more young people to the industry, investing in training and education, and improving working conditions to retain skilled technicians.

Because of these issues, it is apparent that we will continue to see raising rates among the auto insurance industry as well as many other insurance industries.

Sherry BermanSherry Berman
17:55 08 Dec 22
We just moved over to e3 with Chris Stone, 1 1/2 years ago. Our house flooded during snowmeggedon in Texas last February. The insurance companies were overwhelmed with phone calls from Texas. Our insurance company was not responding to us on a timely basis, and because of the supply chain shortage, we knew we needed to act quickly. Chris knew who to talk to at our insurance company, and was a total advocate for us and made sure that our needs were being taken care of. Our last insurance agent was the advocate for the insurance company, not us. Chris knows the business inside out. He guided us along the process of what to do. e3 represents many different insurance companies, which gives Chris the ability to guide you into the best policy that meets your needs. He explains the insurance lingo in layman terms, and makes sure that you and your family are protected. My husband and I totally trust Chris to give us the best policy with in our budget.
Andy BermanAndy Berman
21:56 07 Dec 22
e3 Insurance and Chris Stone are simply the best!! After experiencing a flood in our house and a total redo necessary, Chris made the experience completely seamless!! There simply is no one better!!
Alex ThipkhosithkunAlex Thipkhosithkun
19:32 03 Nov 22
I can't say enough good things about Chris at e3 Insurance. He really is an expert in his field and was really helpful and thoughtful through my home and car insurance purchasing experience. But it doesn't stop there. Recently, I was facing a relatively stressful plumbing situation with my newly purchased house and after talking to Chris and putting me in contact with the right people, they had someone come out THAT afternoon-- Amazing!
Austin SandozAustin Sandoz
14:45 06 Oct 22
Chris was a client of mine for a long time. When I reached out to get a quote I was blown away. I found out my brand-new 2022 Jeep was severely underinsured and I had little to no protection for my assets.After comparing my old policy side by side with my new policy he was able to quadruple my coverage and protect my assets for LESS than what I was paying before. When it's done right, it's done right.
Sheryl KlousiaSheryl Klousia
14:29 06 Mar 22
Chris has been extremely helpful in finding us great policies for house and car insurance. He reviews our policy yearly to ensure we are getting the best rate and best coverage… and recommends changing when needed. We are very satisfied with his service… he has saved us so much over the 3 years that we have been with him ! So glad we found him. Our kids all use his services also !

Like this article?

Share on Facebook
Share on Twitter
Share on Linkdin
Share on Pinterest

Leave a comment