You are feeling the pinch everywhere, from the gas pump to the grocery store and even to your insurance. Inflation is making every single thing more expensive and it’s as painful for us as it is for you.
Here’s the reason why your insurance rates are going up:
- More Frequent and Severe Accidents – In the first six months of 2021, nearly 2.5 million people sustained injuries from an auto accident that required medical consultation. Accident fatalities increased 14% between January 2020 and January 2022. More frequent and severe auto accidents increase the number and cost of auto insurance claims.
- Supply Chain Issues – The ongoing shortage of semiconductor chips and other auto parts make it more time-consuming and costly to repair a vehicle after an accident. Chip scarcity means the auto industry is producing less vehicles, which leads to #3.
- Fewer Cars = Higher Prices – Inventories of cars are extremely low, down 87% between 2020 and 2022. That makes new car prices 14% higher and used car prices a whopping 55% higher.
- Skyrocketing Material Costs – In 2021 alone, construction materials increased 14.1%, with lumber being a big part of the inflationary trend, tripling in price since March 2020.
- Labor Shortage – The home building industry is facing a shortfall of at least 200,000 skilled workers.
- Low Housing Inventory and Historic Demand – As of March 2022, there were only 870,000 homes for sale in the entire United States, which is down 60% over the past two years. Low inventory has resulted in the median home price increasing 23% since 2019.
As your independent insurance agents, we have the ability to shop your coverage with multiple highly-rated insurance companies, which means when you get an ugly renewal, we likely have a lower-priced option that won’t skimp on coverage.
We also utilize tools to save you money with your current carrier, such as ordering a refreshed credit score or rewriting your policy to take advantage of new pricing offered by the insurance companies.