Skip to main content
Auto InsurancePersonal Insurance

What is Happening in the Insurance Market?

By August 8, 2022No Comments

By: Austin Peek

You may have seen some of our posts about the state of the insurance market or why your rates may be increasing, but let me provide some additional insight on why we are seeing so much change in the marketplace.

As we are all too familiar with, the market has surged at historical rates and the cost of just about everything has continued to increase. Costs of groceries, gas, housing, vehicles, etc., continue to rise and put a financial strain on many families. Not to be excluded, you have likely seen your insurance rates increase as well. While we would love for insurance rates to go down, unfortunately, insurance companies are feeling the burden of increasing costs of goods as well. Not only are the costs of vehicles increasing, but the costs of repair on vehicles has also continued to rise due to a multitude of reasons including an increase in technology on vehicles. Unfortunately, a damaged bumper is no longer just a couple-hundred dollars, but now can be a couple grand with sensors and cameras being built into bumpers. An increase in repair and vehicle costs have driven the average claim payouts higher than before. The continuous increase in payout of claims is forcing carriers to increase the rates they charge to offset their losses. While we would love to see rates decrease for consumers, we are more than likely headed for a continuous trend of rate increases for the foreseeable future given the state of the market.

Not only has an increase in costs of goods led to an increase in auto insurance rates, but supply chain issues, labor shortages and driving habits are also a key factor in your rate increases. As supply chain issue woes continue and the unemployment rate continues to rise, vehicles are being held longer before repair. The lack of supply and increase in demand has also created a natural increase in the cost of making repairs. This can be partially attributed to changing driver habits as well. In return to the roads from COVID lockdowns, we are seeing Pre-COVID level driving patterns, which has increased the rate of accidents. When needs for repairs increase, but parts and labor are more scarce, you have an unfortunate storm of rising costs and troubles.

As I have outlined above, there are a number of reasons why your insurance rates continue to rise and why they are more likely to continue to rise rather than decrease. With the understanding of the key factors leading to rate increases, you will understand that preparing accordingly and maximizing available discounts is the best option to managing your insurance rates. The ultimate goal of insurance coverage is to provide protection in time of need, and lowering limits to reduce premium undermines the solution that insurance is intended to provide. Focusing on available discounts and planning is more important now than ever before. Below are a few available discounts that could help you manage the rising insurance rates.

– Bundling Home and Auto for multi-policy discount
– Multi-Driver Discount
– Safe-Driving Technology
– Planning ahead for “Advanced-Quote” Discount
– Good-Driver Discounts with clean records and Accident Prevention courses
– Low-Mileage Discount
– Good-Student Discount
– Pay-in-full Discount

Our mission is to help you maintain adequate limits, while also finding the best value for you. While rates are likely to continue increasing, our job is to continue to serve you with the best coverage we can. Please give us a call to make sure you are maximizing all available discounts and carrying adequate limits of coverage.