If you opened your home or car insurance bill recently and noticed it’s higher than you expected, you’re likely experiencing the insurance rate increases being made by most insurance companies in late 2022 and into 2023. Insurance companies are raising their rates in response to significant changes in the marketplace.
To answer your questions about these changes, we put together an insider look into why your home and car insurance premium may go up.
Why did my car insurance go up?
- Increased severity of car insurance claims
- Price increases for replacement parts
- Availability of replacement parts
- Repair shops are short-staffed
- Repairs are taking longer, which increases the total cost to rent a vehicle since you may need it longer
There is also a shortage of new and used vehicles. Because of these shortages, the prices to replace a vehicle have significantly increased, making claims for totaled cars much more expensive.
Of course we can’t forget inflation. Just like many industries right now, inflation if driving up prices.
Why did my home insurance premium increase?
- Material Costs
- Labor Costs
- Replacement Value
- Liability Claims
Adapting to Inflationary Pressures: While rate increases due to inflation can be frustrating for homeowners, they are a necessary response to maintain the financial stability and solvency of insurance providers. It is crucial to understand that insurance companies must continually evaluate risk factors and adjust their rates accordingly to ensure they can fulfill their contractual obligations to policyholders.
What if I didn’t file any claims?
Filing a claim can affect your rates. However, this particular rate increase is usually going to be more heavily motivated by the drastic changes in the marketplace.
Should I switch my insurance?
Seeing your rate increase may prompt the question of switching insurance companies. Since this is a change affecting the entire insurance industry, rates may not be that much different with another carrier. However, it never hurts to check.
We are your local, independent insurance agent, which makes us a great resource. We can help you by comparing quotes from multiple insurance companies to find the coverage and rate best for you.
While it’s tempting to switch to achieve that lower price tag, make sure you check the insurance company’s service ratings, coverage options and limits. This is especially important today, since repairing and replacing a vehicle is far more challenging. Switching to an insurance provider that has a lower rate but also lower service ratings or coverage limits may leave you scrambling when you submit a claim.
What can I do?
Call us to review your policies!
Info provided by Auto-Owners Insurance Company and Hanover Citizens Insurance Company
