Why Are My Insurance Rates Going Up?

Have You Seen The Price Of Eggs?

I am sure most everyone remembers 3 years ago when eggs were $1.29  and today they are 4 or 5 times higher than that.  Unfortunately the insurance industry is not immune to the inflation that is hitting our nation.  Rates are going up, thankfully not at the same rate as eggs but still going up.  Below are some base reasons why and then some items we can do to slow the escalation.

  1. Building material inflation. From 2010 to 2020 building materials inflation averaged 3-4% , in 2021 material cost have risen 23.1% and 2022 another 15%.
  2. Labor inflation the cost of labor has increased 8.62% in construction trades in 2022 largely from lack of skilled employees.
  3. Soring used car market The average used car price is up 21%, this is what total loss settlements are based on.  At the beginning of 2023 they are down slightly but still significant jump over 2020.
  4. Increased cost to repair cars and trucks Auto body repair cost are up nearly 10% over inflation.   Lack of workers, materials and supply chain shortages are causing these issues.   Also, higher tech sensors mounted on windshields have taken $250 standard replacement and made it cost over $1000.
  5. Increased medical cost This is always a constant
  6. Natural Disaster HAIL, HAIL, HAIL   in 2020 there was 14.2 billion in hail damage to homes and cars.  Many homes received damage in our area over the past 5 years.   Natural disasters on a global level cause reinsurance company (companies insurance companies buy coverage from) to raise rates.   National disasters do the same thing plus cause rate for the companies themselves then state and local disasters also raise rates to recoup losses.
  7. 18.9% increase in re-insurance in 2022 and another 10% expected for 2023.   Re-Insurance is the place insurance companies buy insurance on a global basis to limit losses.  So a major loss such as a tornado hits an area,  A company may choose to cover the first $20 million then the reinsurer will cover the rest.

What Can I Do?

There are some things we can do to ease the pain.  Here are some suggestions:

  1. Have your replaced your roof in the past 5 years? If so Let us know, this could be a huge discount.
  2. Have you been insured at the same carrier over 3 years?  Many carriers offer re-price tools after a certain amount of time.  It will make sure you are getting best price at that insurer for no claims and good credit.
  3. Telematics, Telematics, Telematics!    Smarter underwriting is here to stay.  For years people have said I don’t drive that much I should get a lower rate.  Well Telematics is the answer, it is either connected to your car or on your phone and it tracks when you drive, how fast you drive and how hard you stop or take off.  We have seen several clients save 20% or more per year with telematics, and those savings will continue to deepen as time goes on.    Also some companies only give a discount and no surcharge.   They feel just by you having it your driving will be more intentional.
  4. Grandma always said nothing good happens after mid-night.  It is the truth, and time of day driving is one of the bigger discounts in Telematics.   Less cars are on the road at 1 am but the accidents be in sleepiness or alcohol, or careless tend to be far more frequent.
  5. Take higher deductibles on Home and Cars.  Insurance is sharing a risk with an insurance carrier.  If you take a little bit more of the risk your rates could drop.
  6. Shop your insurance with an Independent Agent. An independent agent gives you the ability to shop your insurance with 10-15 companies all at one.

Remember, we are an independent insurer so we can shop rates for you if you experience a significant change.  Simply call our office and we will make sure you are in the best position.  However a word of warning, some carriers are not giving best rates to people who change yearly.  It seams 3 years is the sweet spot but not always.  The best bet is to call us at Millennium Brokers Group and see what the best steps for your situation are.

Request Your Proposal Here

Are you ready to save time, aggravation, and money? The team at Millennium Brokers is here and ready to make the process as painless as possible. We look forward to meeting you!

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