Don’t be surprised to see continued increases in your home and auto insurance premiums—it’s a trend affecting the entire insurance industry. Mike Godby, Insurance Services Operations Manager at Member Benefits, explains, “While many hoped prices would stabilize by now, it is unfortunately not the case. So as costs continue to rise, it’s important to make sure your insurance coverages are still appropriate.”
What is causing these ongoing premium increases? It’s a perfect storm of many ongoing factors. Inflation is one reason, along with supply chain and labor shortages, damage from more extreme weather, and increasing fuel costs, just to name a few. As a result, claims are becoming more frequent and more expensive, which in turn makes it more costly for insurance companies.
The demand for housing continues to be high and supply low, causing skyrocketing home prices. Many people who are renovating, repairing, or rebuilding their home are being affected by longer waits for qualified contractors, delayed supplies, and the rising costs of materials. “The majority of home premium increases are due to the higher coverage amounts necessary, as well as the increased costs required to rebuild homes in the event of a loss,” says Mike. “Those who are experiencing longer waits to get back into their home are claiming more living expenses from their policies as well.”
A May 2022 Insurance Information Institute (Triple-I)/Milliman report found that overall miles driven are largely back to 2019 levels, but that riskier driving behaviors have led to increased insured losses and fatality rates—distracted driving is being blamed in part. And in recent years, medical and auto body repair costs have increased at a rate much faster than inflation (Triple-I). Vehicles have more sensors and technology than ever before, and they cost more to repair/replace when damaged. Diesel prices, which affect trucks that carry supplies, are up $2.43 from a year ago (U.S. Energy Information Administration, June 13, 2022). Consumer gas prices are up as well, making it more expensive to drive—and even Uber added a consumer fuel surcharge in March to help their drivers and couriers with costs (Uber Newsroom).
What you can do
Wondering what to do? Mike says, “Talk to us. Make sure you’re getting all of the discounts to which you’re entitled. If you raise your deductible, you may save some money on premium—just make sure you can afford it. On older cars, you might consider dropping collision and/or comprehensive coverages. And maintain a good credit rating, which can also cut your insurance costs. We can help you sort through the options.”