Why Are Insurance Prices Rising in 2023?

Recently, many of our clients are asking us why their insurance is getting so expensive, and trust us - we understand why! Just as rapid inflation is affecting so many parts of our daily lives, insurance is unfortunately no different. We know that price hikes can be frustrating, making it important to understand exactly what is causing these increases, as well as what you can do to get through this current market. 

What is causing price increases? 

It’s key to understand that insurance agents like us have no control over the current prices, as the insurance companies we work with (especially those focused on auto and home insurance) are looking for any ways that they can stay afloat in our current inflationary market. This includes issuing less policies and raising the prices on already issued policies. 

As you may or may not have noticed, the cost of claims have grown exponentially in just the past couple of years. This can be due to numerous factors, including:

• Increased cost of labor for construction/repairs
• Supply chain issues limiting resources for repairs/replacements
• Higher rates and severity of auto accidents
• Increased cost of medical care, affecting claims involving bodily injury

On top of all these reasons, reinsurance is especially affecting the insurance market - as many markets are approaching capacity. Reinsurance being the added insurance carriers buy to help cover catastrophic losses.

Because of the increased cost of claims, insurance companies are raising premiums across the board, regardless of what your personal claim history (or complete lack of claim history) looks like on your own policy. 

We understand that these inflated insurance costs can be frustrating, especially when you had nothing to do with it! Unfortunately this is currently what the insurance market looks like, and doesn’t seem to be improving any time soon. 

How can I save money on my policies? 

There are still things you can do to help mitigate these price hikes when it comes to your own insurance policy. These include: 

• Setting higher deductibles
• Bundling your current policies (home, auto, umbrella, etc.)
• Lowering your current limits
• Eliminating optional coverages you don’t need on your policy 
• Enrolling in telematics programs 
• Switch to paperless billing and pay ahead via EFT

Remarketing your policy to another carrier can also be a good option to shop for other prices, but some carriers may also offer discounts or price breaks for longtime members who don’t swap carriers. 

Staying afloat during inflation 

As always, be sure to reach out to your insurance agent for any more tips on savings or potential discounts you may apply for. We know how difficult it can be to save money these days, which is why we want to make sure you’re getting the most out of your insurance at the most affordable price for you. 

Interested in learning more? Then check out our article on the changes in the insurance market in 2023 and how they will be affecting your policy: What to Expect From Your Insurance In 2023.