The insurance industry has experienced significant rate increases across various insurance types, mainly in auto and homeowners insurance. These increases are driven by a combination of factors such as rising claim costs, inflation costs, natural disasters, and more. No matter who you are insured with, you will most likely (or have already) been affected by insurance rate increases.

What To Know About Insurance Rate Increases

It is important to remember that a rate increase is not personal, it is a part of how insurance works.

Your insurance rate is set and controlled by your insurance carrier, not your agent. Your insurance agent has no control over your rates, claims, or non-renewals. Your insurance agent is to help provide knowledge on insurance, ensure you have the best insurance at the best rate available for your family, manage your policy with the carrier, and help with claims when needed.

The Factors Behind Rate Increases

Inflation: Inflation affects nearly every sector of the economy, including insurance. As general living costs rise, insurers may increase premiums to maintain profitability while covering claims adequately.

Increased Claims Frequency: A rise in accidents on the road translates to more claims for auto insurers. Similarly, an uptick in thefts or property damage can lead homeowners’ insurers to raise their rates to cover potential losses.

Natural Disasters and Climate Change: The rising incidence of severe weather events has increased the costs associated with property claims. The frequency of weather events causing significant damage has escalated, leading to costly claims and higher premiums. Insurers must factor these potential losses into their pricing structures to sustain coverage affordability.

Regulatory Changes: State regulations can also impact insurance rates significantly. Changes in laws regarding coverage requirements or liability limits may force insurers to adjust their pricing structures.

Supply Chain Issues Continued disruptions in global supply chains, initially driven by the pandemic, have made parts and materials more expensive and difficult to obtain. This impacts the auto repair industry and the construction of homes, causing insurers to adjust their rates accordingly.

What To Do If Facing an Increase

If you have experienced an increase in your premium, contact your insurance agent before you cancel you

• Ask for a policy review
• Do not cut coverage to safe money – Lowering coverages could ultimately cost you more money in a loss
• Consider higher deductibles
• Bundle your policies
• Ask about Safe Driving Telematic Programs
• Consider tenure (is it worth it to change carriers in the long run)
• Purchase your insurance from an experienced licensed insurance agent
• Always do your research

More Information

• Auto Insurance Increases
• Homeowner Insurance Increases
• Auto Insurance 101

Conclusion

Rising auto and homeowner insurance rates are a reality for many consumers today. Understanding the underlying factors and taking proactive steps can help mitigate the impact of these increases. As the market continues to evolve, being well-informed is the best strategy for protecting your financial future and ensuring adequate coverage for your most valuable assets.

The information contained in this blog post is provided for general informational purposes only. The information is produced from my own personal experiences and personal research. While my main goal is to keep the information up to date and correct, I make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability concerning this blog post or the information, products, services or related graphics if any contained in this blog post for any purpose. The information is not meant as professional or expert advice, and any reliance you place on such information is therefore strictly at your own risk.