In recent years, countless drivers have felt the pinch of rising insurance rates, a trend that shows no signs of hitting the brakes.
- In 2023, the average annual auto insurance premium in the U.S. increased by 14.41%, according to the National Association of Insurance Commissioners (NAIC).
- The Zebra reported that the average annual car insurance cost in 2023 was $1,851, a 5% increase over 2022.
- CNBC reported on September 23, 2025, that the average cost of full coverage car insurance is $2,671 per year (or about $223 per month), according to Bankrate. That’s an increase of about 12% from last year and 50% from 2020.
Understanding the factors behind rising auto insurance costs is crucial for consumers, especially when combined with diminished value claims—the decrease in a vehicle’s resale value that occurs following an accident. Wreck Check Atlanta can assist clients affected by these changes.
The State of Auto Insurance Rates
The increase in auto insurance premiums can typically be attributed to several key factors:
- Inflation: As the cost of repairs and medical expenses continues to rise due to inflation, insurance companies must raise their premiums to cover these increased costs. As of August 2025, a Bureau of Labor Statistics (BLS) Consumer Price Index (CPI) report showed that motor vehicle repair costs had risen by 8.5% over the previous 12-month period. The statement that costs increased by nearly 5% was true for the period between July and August 2025 alone, during which a 5% jump was recorded.
- Increased Repair Costs: Modern vehicles are equipped with advanced technologies and safety features that, while beneficial, can also lead to higher repair costs. For example, replacing parts like bumpers or sensors now often requires specialized repairs that can quickly add up.
- More Accidents: According to data from the National Highway Traffic Safety Administration (NHTSA), the number of car accidents has increased significantly since the pandemic began. In 2021, there were over 42,915 fatalities on U.S. roads, contributing to greater insurance claims and higher premiums.
- Fraud and Scams: Auto insurance fraud, including staged accidents and inflated claims, has also been on the rise. To combat these fraudulent activities, insurance companies may raise their rates across the board.
- Economic Rebound: As the economy regains strength, more people return to the roads, leading to an increased likelihood of accidents, which can impact insurance costs.
The Impact on Diminished Value Claims
As insurance rates rise, drivers should also be aware of how these increases directly impact diminished value claims. A diminished value claim arises when a car’s value decreases after an accident, even when it has been repaired. For example, if a car worth $20,000 is involved in an accident, even after repairs, it may only be worth $15,000, resulting in a $5,000 diminished value claim.
When insurance rates are high, the stakes for insurance companies grow, making them more aggressive in contesting diminished value claims. This means policyholders may face challenges in getting the compensation they deserve. Furthermore, higher overall repair costs from inflation and advanced technology can lead to lower payouts or even outright denials of claims.
How Wreck Check Atlanta Can Help
At Wreck Check Atlanta, we specialize in helping clients navigate the complexities associated with diminished value claims and insurance disputes. Our experienced team can assist you in evaluating your vehicle’s value after a collision, accurately estimating any losses and guiding you through the claims process.
We offer a range of services, including:
- Diminished Value Appraisals: We provide detailed assessments to determine the value lost due to an accident, ensuring a fair and accurate evaluation.
- Expert Claim Assistance: Our team can help you formulate a strong diminished value claim that withstands insurance company scrutiny.
- Negotiation Support: We advocate on your behalf to ensure you receive fair compensation.
FAQs on Insurance and Diminished Value
What is diminished value?
Diminished value refers to the reduction in a vehicle’s market value after it has been damaged and subsequently repaired.
How can I file a diminished value claim?
To file a claim, gather documentation of the accident and repairs, and obtain an appraisal to assess the diminished value of your vehicle. Submit this information to your insurance provider.
Will my insurance cover diminished value claims?
Many insurance policies cover diminished value claims, but it’s essential to review your specific policy for details.
How do I calculate diminished value?
Several formulas can be used, but one common method is the 17c formula, which considers the pre-accident value, repair costs and expected depreciation.
Can I negotiate my diminished value claim?
Yes, it’s often beneficial to negotiate. Insurance companies often start with a low offer, so having a solid appraisal can strengthen your position.
Diminished Value Support with High Insurance Rates
As auto insurance rates continue to rise, it’s crucial for drivers to understand the implications on diminished value claims. Being informed can help you navigate this challenging landscape with confidence. Should you find yourself in need of assistance, Wreck Check Atlanta is here to provide expert guidance and support in handling your diminished value claims and ensuring you receive the compensation you deserve. Don’t hesitate to reach out for more information!
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