Inflation and Insurance
Inflation is the rising prices of goods and services over time. Economic inflation can affect the cost of everyday items, building materials, and housing.
The COVID-19 pandemic, supply chain disruptions, and strong customer demand have contributed to the most recent economic inflation issues.
How Does Inflation Affect The Insurance Industry?
Have your personal or business insurance premiums increased over the past year? Inflation can have a drastic effect on your personal and business insurance rates.
Costs for building materials, labor, and claims frequency contribute to the rising insurance cost. When inflation is added to this, the average cost of insurance coverage increases faster.
Will Your Insurance Rates Go Up This Year?
Renewal rate increases are common with insurance companies and vary yearly. Due to inflation, cost of building materials, higher cost to repair vehicles, and prices for contractors and labor, many insurance companies have filed for rate increases. Once the rate increases, the subsequent renewal premium will go up.
Does The Cost of Insurance Increase With Inflation?
Yes, insurance premiums will increase with inflation in many cases as the cost of goods, labor, materials, and services will go up.
Why Do Insurance Rates Go Up?
Some of the factors that increase your personal and business insurance premiums are:
Cost of building materials
Cost of car parts and supply chain disruptions.
Frequency of claims.
How Can I Lower My Premiums?
Though insurance rates are increasing, there are ways to reduce your insurance costs.
Bundle your insurance policies with the same insurance company.
Shop around. Have an independent insurance agent or broker review your coverage and quote your personal and business insurance policies with the companies they represent.
Maximize the discounts on your policies
Use EFT or pay in full for your insurance policies. Many times this will eliminate the additional cost of sending monthly bills. Insurance companies can also offer discounts when choosing these options.
The Bottom Line:
Inflation has a lasting effect on your insurance costs. Coupled with the COVID-19 pandemic, insurance companies are filing for rate increases faster than in prior years.
As an insurance consumer, there are ways to reduce your overall insurance costs. We find that 80% of individuals and businesses pay too much for their insurance coverage. We solve this by partnering with many insurance companies and working with you to find the right coverage to bring the most cost-effective and hassle-free insurance solutions.
If this is the type of relationship you would like with your insurance professional, give us a call or click today, we look forward to doing business with you.