You may have noticed your car insurance rates go up at your last renewal, even if you’ve had no new accidents or tickets.

If your rates haven’t gone up yet, brace yourself: Car insurance companies have been losing money recently, and many will have to raise premiums to remain profitable.

Car insurance rates typically go up about 3% or 4% every year, according to the consumer price index. But in December 2016, they were up 7% from the previous December. Because the industry is expected to lose even more money this year due to more claims — and more expensive claims — we can expect insurers to kick up their rates even more. Here are some causes behind the bigger bills.

Problem No. 1: More people have jobs

A better job market isn’t helping insurance rates. Unemployment has dropped from 10% in October 2009 to 4.3% in July 2017.

With more people employed, “We see more people on the roads, more people commuting,” says Janet Ruiz, the Insurance Information Institute’s California representative. That means more accidents, she says.

Problem No. 2: Fewer people looking at the road

Most of us have been distracted by a cellphone behind the wheel. A recent NerdWallet study found that 67% of Americans surveyed who had driven in the last 12 months had used a cellphone while driving during that time.

Cellphones aren’t the only distraction on the road. The problem “is a combination of so many things,” Ruiz says. People are still distracted by the same things they always were behind the wheel — grooming, eating, children in the back seat and so on.

Distraction played a role in 14% of all police-reported motor vehicle traffic crashes in 2015, according to the Transportation Department.

Problem No. 3: Claims are getting more expensive

State Farm, the largest auto insurer in the U.S., has seen a continual rise in claims costs due to more expensive vehicle repairs and rising medical costs in recent years, says Sevag Sarkissian, a State Farm spokesman. Many insurers are seeing the same trend.

  • Medical bills: You might not think of medical bills as a big contributor to car insurance premiums, but auto insurers, not health insurers, often end up paying for medical costs due to car accidents. The cost of hospital care rose 32.5% from November 2010 to November 2016, according to the Labor Department.
  • Car technology: The safety features, cameras, sensors and computer systems now commonplace in new cars may help make drivers safer. But these sophisticated car parts are expensive to replace after accidents, Ruiz says.
  • The consequences: The number of crashes rose 3.8% from 2014 to 2015, the most recent year for which data are available, according to the Transportation Department. During that same time, insurers paid out $7.5 billion more in claims and expenses than they made from premiums, according to the insurance institute. And auto insurance rates were up 7.7% from June 2016 to June 2017, according to a consumer price index that measured all urban consumers.

In 2017, the private passenger auto insurance industry is projected to lose $154 billion, a new record, reflecting an increase in the number and cost of claims, according to a recent report by S&P Global Market Intelligence, an industry research company.

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