Inflation Continues to Impact Insurance Policy Premiums in 2023
We all feel the impact of inflation. Whether it is at the gas station, grocery store and your insurance policies at renewal. Unfortunately, the insurance industry continues to be impacted as insurance carriers are forced to adjust their risk based on inflation and claims.
We know it is frustrating to see your premiums increase even though you may not have experienced any activity such as an insurance claim. Inflation is the main reason insurance premium rates continue to increase across the country.
Another strike against policyholders is the rise in insurance claims across the country. Not only are insurance carriers receiving more insurance claims than before, but it is also costing insurance carriers more with settling claims.
Anytime insurance carriers see an increase in claims and the cost to settle these claims, they will raise their premiums to all customers around the country. Some insurance carriers have even dropped offering specific policies in certain states which experience a high severity.
Summary on why your insurance policy went up even though you didn’t file a claim or receive a vehicle infraction:
- Building materials for homes have increased (some materials are 20% to 50% higher now).
- There are less skilled workers available to work. This means companies are now paying higher wages to those who are available to work.
- Car parts and equipment are more expensive (some over 22% higher now).
- It costs more to maintain and repair vehicles.
- Used cars prices increased over 37% since 2020. New car prices have increased over 20%.
- Medical bills for insurance claims have increased.
- Most companies are now using underwriting holding periods by asking for proof of ownership, photos of interior and exterior of home, proof of when roofs, plumbing and HVAC systems were updated. I.e. Requiring receipts for the work, etc. This may delay or help insurance carriers avoid writing any new policies until their rate increases are approved, which may be 20% to 50% higher.
- Some carriers are no longer offering insurance to high risk areas or on specific vehicles (wildfire areas, specific cars that are prone to theft, etc.) The insurance carriers who continue to offer insurance coverage have to take on additional risk, which makes insurance premiums more expensive.
If your insurance policy has increased significantly, reach out to us. We can re-quote you with other insurance carriers we represent to see if we can find you a more affordable policy. This is one of the best benefits of working with an independent insurance agency. We advocate for you!
Here are some ways we have helped customers save on their insurance premium. Each of our insurance carriers offer unique discounts so reach out to us to review your current policy.
- Bundle your home and auto insurance policies together.
- Install and maintain a burglar alarm system on your home and receive a protective device discount.
- Discounts for your teenager – good student or distant student (for college students who attend school more than 100 miles away)
- If you recently built a home or significantly renovated it, you may qualify for a discount.
- If you have been accident-free for at least three years, you can be eligible for a discount.
- Earn a claims-free check too! Eligible customers who remain claims free for 6 months can receive a check in the mail from some insurance carriers. Score another check if you remain claims-free for the rest of the year on your policy.
Bonus Coverages Offered
With the rise in insurance premiums, some insurance carriers have added additional coverage to their policies.
Water backup, service line and personal property replacement for claims are the three most common coverage upgrades.
Contact your agent if you have any questions regarding your current insurance policy. We are here to help.