Why Are Insurance Rates Rising?

Why Are Insurance Rates Rising?

Aug 09 2022

Why Are Insurance Rates Rising?

Insurance rates are not immune to inflation, as experts are predicting the price will rise for many in 2022. With a 40-year high inflation, and supply chain issues, the costs of goods and services are way up. This also means that the cost of protecting and repairing those goods and services is also up across the country. But let’s dig deeper. We’re here to explain why your insurance rates may be rising in 2022—even if you didn’t file a claim.

Homeowners Insurance Rates

Both inflation and climate events are some of the factors causing homeowners insurance rates to rise. Over the past five years, extreme climate events have been increasing—from an annual average of 7.7 events in 1980-2021 to an annual average of 17.8 events in 2017-2021. Natural and manmade disasters often have unfortunate impacts on the insured, as well as insurance companies. To read more on this in detail head over to our blog – How natural or manmade disasters can affect your insurance.

We also saw a massive housing market boom. At the same time, the nation largely suffered from shortages in materials from lumber to oil. Recent data from the U.S. Census Bureau shows construction costs went up by 17.5% year-over-year from 2020 to 2021, the largest spike in this data from year to year since 1970. 2021’s costs were also more than 23% higher than pre-pandemic 2019. This means that the cost of rebuilding or repairing a home in case of disaster also increased, which impacts insurance rates.

Auto Insurance Rates

According to the most recent report from the National Highway Traffic Safety Administration, an estimated 31,720 people died in car crashes during the first nine months of 2021. Despite the lower levels of traffic due to America’s widespread shift to lockdown and remote work. That figure represents a 12% increase over the same period in 2020. The 12% increase in road fatalities is the largest year-over-year rise ever recorded by the agency, and the projection of nearly 32,000 deaths on U.S. roads is the highest for any January-September period since 2006. Unfortunately, more fatal accidents and more claims equals more losses, and more losses equal raised rates for everyone, not just the drivers involved in accidents.

Inflation has also taken its toll on auto insurance rates. Used car prices soared, and there was a shortage of new cars for sale. At the same time, the cost of labor and parts also increased. This leads to cars being more expensive to repair should you suffer a loss.

Can Bundling Insurance Help with Rates?

Many insurance companies offer home and auto insurance bundles or packages, which has a number of benefits, discounts, and unique coverage opportunities.

One of the biggest perks is the money you can save. Bundling your home and auto policies can save you up to 20% or more on your premium with qualifying discounts. Bundling your coverage is also convenient, since all of your protection is in one place. You will have only one login to manage, less paperwork and often just one monthly bill.

How to Get Great Coverage at a Great Rate

One of the big benefits of using a local insurance agency is the personalization. Our insurance agents WANT to help you save money, and get to get you the best coverage for your specific needs.  They investigate all of our carriers to be sure you’re getting all the discounts you qualify for without sacrificing coverage.  Also, our local agents live in the same communities as you do—they know that pothole, drive through the same dangerous intersection, and deal with the same crazy weather.

By choosing a Bearingstar agent, you not only are getting a trusted advisor but the best coverage at an affordable price. Contact a local Bearingstar agent today to see what policies and options will work best for you.

Call us at 877-801-7424 in Massachusetts, and 888-519-9996 in Connecticut.


Back to Blog