Inflation will cause the price of all insurance policies to rise slowly, but you may have noticed that your auto insurance has risen more than normal lately. Most lines of insurance cycle between soft and hard markets over a number of years, which has a direct impact on the price you pay. Now, the auto insurance market is currently hardening after many years of a soft market, which has resulted in higher prices for personal auto policies.

Between 2011 and 2016, competition between insurance carriers created a soft, buyer-friendly market. Since then, however, a number of factors have caused carriers to increase their prices in order to make a profit.

More Drivers (and Distracted Drivers) Lead to More Accidents

Thanks to low gasoline prices and rising employment rates, more Americans can afford to drive. However, more vehicles on the road lead to more accidents that must be paid for by insurance carriers. Many carriers transfer this cost to policyholders by raising premiums.

The number of accidents has also risen because of an increase in unsafe driving practices. According to the AAA Foundation for Traffic Safety, about 87% of drivers admitted to engaging in at least one risky behavior while behind the wheel, including using their phones and not wearing seat belts.

Claim Severity

The size of the average insurance claim—also known as claim severity—has increased as well. The three largest drivers of claim severity include the increase in the costs of medical care, auto repairs and auto parts. According to a recent study by CarMD, the largest repair cost comes from replacing the expensive technology that’s common in newer vehicles, as body shops struggle to afford the special equipment and training required to perform the repairs.

Uninsured Motorists

Most states require you carry auto insurance as a way to cover your own liability and provide compensation to others in the event that you’re responsible for an accident. Despite this, approximately 13% of drivers drive uninsured. According to the Insurance Research Council, uninsured claim payments have risen by 75% over the past 10 years, resulting in a $14 premium increase for every insured individual.

Insurance Fraud

Insurance is meant to protect you in the event of an accident, but many criminals try to illegally use insurance policies for their personal gain. Most fraud schemes involve a policyholder faking an injury and blaming a third party.

Although insurance carriers attempt to uncover the truth during all insurance claims, the Insurance Information Institute estimates that insurance fraud costs the United States $32 billion per year. Unfortunately, much of this cost is transferred to law-abiding policyholders.