The last several years has brought many challenges with the cost of goods and services. Insurance is no different as we have seen premiums rise substantially in the last several years.

It is important to remember that the cost of insurance is influenced by many factors, with the cost of goods and services the most substantial. Think about what insurance pays for : auto body repair - parts, labor, rental car;  home repair -material cost, labor, transportation, additional living costs;  medical expenses - doctor, hospital, ambulance, prescription, loss of income;  lawyer fees, and a host of other expenses. When these costs rise, so do your insurance premiums as there needs to be enough money in the "bank" to pay your claims. If a repair that was $2,000 in 2019 has risen to $4,000 in 2022, your insurance will need to increase to reflect the higher cost.

What also puts extra pressure on your auto insurance rate is the increased severity of losses we have experienced. For example, According to the NHTSA, miles driven declined by 11% in 2020. Less risk, correct? Unfortunately, even with the reduction in miles driven we saw a 6.8% increase in fatalities. This was followed up by an additional 12% increase in fatalities in 2021. The increased severity of accidents also impacted the cost to repair vehicles that were damaged. While these are national figures, we have seen a comparable increase in the severity of accidents locally. Studies continually show there is more aggressive and distracted driving on the roads today. This, coupled with increased costs for materials, medical care, and services, has led to the rising premiums we have seen, and will likely continue to see for the foreseeable future.

When we look at property insurance we see many related factors creating increased rates. As we all know, the cost of building materials has skyrocketed since 2019. How bad has it been? Well, according to the Bureau of Labor Statistics, we have seen an increase of 8% in 2022 for building materials, there has been an increase of 20.4% year over year and an increase of 33% since 2020. Sound bad? Let's take a looking at building services to finish off what we have seen in property costs. Through March we have seen building services increase 15.2% in 2022, while increasing 18.4% year over year, and a whopping 39% increase since 2020. As a result of these increases, the value of property has greatly increased. Coupled with the increased frequency and severity of weather events, there has been tremendous pressure on the premiums companies need to charge to cover the increased cost of repair or replacement. Until we can get a handle on these expenses, property insurance will continue to rise.

So what can you do? There are a number of steps you can take to help with your insurance costs.

1. Carry as high a deductible as you can reasonably afford. For property policies, raising your deductible to $1,500 or $2,500 can make sense economically. For your auto, carrying a minimum of $500 with a look at $1,000 is recommended.
2. Maintain your property. Keeping your property and vehicles in good condition can lessen the likelihood of a loss occurring. Be sure to notify us if you replace your furnace, wiring, plumbing, or shingles as discounts may be available when you do.
3. Keep your insurance with a single company. In almost every case, bundling your insurance with the same company will improve your value.
4. Review your insurance with your agent periodically to ensure you are only insuring what you need at the best value.
5. Remember, Independent Insurance Agents have multiple companies to work with. If your agent only has one company, it would be advisable to compare with an Independent Agent for a deeper comparison.