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Why Are My Premiums Going Up?

You may have recently received a notice that your insurance premiums are increasing, which can be confusing.  If you’re wondering why you received an increase in your premium rate, we’re going to discuss what is happening in the industry, and what you can do to ensure you get a good deal on your insurance.

 Why are my insurance premiums going up?

As the pandemic winds down, Americans are driving more and accidents are on the rise. Cars and homes have also been in danger from floods, hurricanes, and wildfires. If you have automobile insurance or home insurance, fixing or replacing your personal assets are often mitigated by your insurer, but recovering from accidents and natural disasters has seen an increase in cost.

Unfortunately, insurance is subject to inflation like any other industry. Recently, an increase in inflation has occurred because of supply chain issues and labor shortages. In October, the auto insurance index was up to 6.3% versus the same month last year. This increase was driven by the rising costs of vehicle-repair costs. Subsequently, insurers have adjusted their car insurance premiums in response to the growing expense of paying for equipment parts, materials, and labor.

This phenomenon isn’t exclusive to vehicles. Home repairs have also seen an increase in repair costs that have also led insurers to increase their home insurance premiums. The cost of rebuilding can be a substantial risk for insurers.  If you lost your home in a wildfire, your neighbors may also be in the same position as you. This leads to labor costs increasing substantially when multiple homes are being rebuilt in the same area. Insurance also needs to cover costs like demolishing and removing the remaining structure of your home. Overall, the recent inflation and increase in natural disasters has made home repair and rebuilding more costly than in the past.

Ultimately, many insurance companies are increasing insurance premiums due to inflation, rising costs of materials and labor, and regularly occurring natural disasters.

Should I switch insurance carriers?

An increase in insurance premiums isn’t fun but that doesn’t mean you no longer have a good deal. The entire insurance industry is seeing a rise in costs. Even if it hasn’t affected other insurance carriers yet, it’s inevitable that they will also have to increase their insurance premiums. It may not be the best decision to quickly switch carriers only to receive a big rate increase anyway from your next carrier.

So, what can you do to ensure that you receive high-quality insurance coverage at the lowest rate? It’s important to choose an insurance agency that is dedicated to making sure that you receive consistent, competitive rates, over the long-term.

At Ross Insurance Agency, we continuously monitor the market for competitive pricing to share with our customers. Our experienced team of insurance professionals is on your side, and we want to help you protect your assets and livelihood from potential disasters, at an affordable rate.

If you’re in Lancaster, PA, please give us a call at 717-397-4729 or request a quote online. We’re happy to discuss your insurance options with you.