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Five key factors driving the sharp increase in auto insurance costs

Welcome back to the latest episode of The Future of Automotive on CBT News, where we put recent automotive and mobility news into the context of the broader themes impacting the industry.  

I’m Steve Greenfield from Automotive Ventures, and I’m glad that you could join us.

A great article by Keith Naughton at Bloomberg this past week summarized why car insurance keeps getting more expensive. 

The cost of auto insurance in the U.S. rose by more than 22% in the 12 months ending in March, which is the largest jump since back in 1976. 

So what exactly is going on? Bloomberg highlights five main contributors.

First, cars are getting more expensive to fix.

A lot of this is because of the amount of technology within today’s cars. During a discussion with a repair shop recently, I discovered that the cost to replace a bumper on a Toyota Camry has increased from $500 to $5,000 over the past decade. 

The second contributing factor to increased insurance costs is the fact that electric vehicles are more expensive to repair than internal combustion vehicles. 

Why is this? The battery is a really expensive component, that can be 40% to 50% of the entire cost of a new EV. In addition, there’s a shortage of technicians and often tools needed to work on EV repairs. And finally, it’s harder to get parts for EVs in many cases.

Third on the list of contributors to higher insurance costs is the fact that we’re experiencing both greater crash frequency, and greater crash severity.  Nearly 41,000 people died in U.S. traffic crashes last year, which is up 13% from pre-Covid 2019 numbers. It’s unclear what role that mobile phone usage and distracted driving might be playing in these numbers.

The fourth contributing factor? We are suffering through a protracted period of a shortage of both technicians and car parts. The industry needs as many as 800,000 more technicians to satisfy needs over the next five years. And EV mechanics are even harder to find.

Last but not least, the insurance companies are playing catchup for the dynamics during Covid. If you recall, drivers were spending far more time at home, not going to work, and not taking as many vacations. As a result, they just weren’t putting miles on their cars, and in many cases insurance companies were actually dropping premiums for a short time.

As vehicle usage shot up quickly, we’ve experienced a surge in traffic, and crashes, and insurers, in many cases, suffered through their worst underwriting losses in decades. So they’ve been overcompensating by raising premiums aggressively to catch up. 

So there you go.

As I look over this list, I’m not hopeful that rising vehicle insurance costs are going to cool off anytime soon. In fact, quite the contrary – I suspect that all five of these trends are likely to continue, meaning that the average consumer is going to have a harder and harder time paying for insurance for their vehicles.

So, with that, let’s transition to Our Companies to Watch.

Every week we highlight interesting companies in the automotive technology space to keep an eye on. If you read my weekly Intel Report, we showcase a company to watch, and take the opportunity here to share that company with you.

Today, our new company to watch is ex9.

Ex9 offers unmanned transport as a service, automating the movement of heavy loads at logistic terminals.

They deploy autonomous yard tractors for the movement of heavy loads such as trailers, containers, pallets and coils.

Ex9 makes automation accessible, safe and easy to adopt for outdoor use cases in closed compounds.

If you’d like to learn more about ex9, and their automated transport services for logistic and manufacturing terminals, you can check them out at

So that’s it for this week’s Future of Automotive segment. 

If you’re an AutoTech entrepreneur working on a solution that helps car dealerships, we want to hear from you. We are actively investing out of our DealerFund.

If you’re interested in joining our Investment Club to make direct investments into AutoTech and Mobility startups, please join. There is no obligation to start seeing our deal flow, and we continue to have attractive investment deals available to our members.

Don’t forget to check out my book, “The Future of Automotive Retail,” which is available on And keep an eye out for my new book, “The Future of Mobility”, which is almost done, and will be out soon.

Thanks (as always) for your ongoing support and for tuning into CBT News for this week’s Future of Automotive segment. We’ll see you next week!

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Steve Greenfield
Steve Greenfield
Steve is the Founder and CEO of Automotive Ventures, an automotive technology advisory firm that helps entrepreneurs raise money and maximize the value of their companies. They also assist PE firms to conduct due diligence on automotive technology acquisitions, advise technology CEOs on strategy, and help represent sellers at the time of sale.

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