Why Are My Insurance Rates So High?
Many insureds may have noticed that 2022 has brought higher premiums for their policies. Anytime the insurance market fluctuates, there are always questions about why rates increased and the feeling of loss of control.
“There’s a lot of things that our customers can’t control. There’s a lot our agency can’t control. The increase in litigation, the increasing cost of material and labor, which all contribute to what seems to be the never-ending increase in our insurance premiums,” says Lee Wiglesworth, president of Wiglesworth-Rindom, “Wiglesworth-Rindom Insurance will continue to focus on what we can control: educating our clients and continuing to grow and train the best team to stay true of our promise to make insurance easy. Even in this chaotic insurance environment.”
WHY IS MY HOMEOWNERS RATE SO HIGH?
Homeowners Policies have seen increases in rates due to several factors. This includes the fact that in 2022 claims are occurring more frequently, and these claims entail repairs and replacements that are more costly. These repairs have been increasing in costs because of the rise in costs of construction and material goods (for example, asphalt roofing increased 16.3% and lumber and wood increased 6.2%).
Homeowners have also seen a stark increase due to litigated claims. In the state of Florida, litigated claims have increased 37% leading to claim inflation. This inflation has caused insurers to provide $15 billion since 2013; $10.65 billion going to trial lawyers, $3.15 billion going to defense costs, and $1.2 billion going to policyholders.
For a quick comparison of how much claims have inflated in Florida — Florida had 95,000 lawsuits in 2021, while the other 49 states had 730 lawsuits each in 2021.
To put it simply: it has become significantly more expensive for insurance companies to provide coverage to Florida Homeowners.
WHY IS MY AUTO INSURANCE RATE SO HIGH?
Auto Insurance has also been on the rise the past two years. This has to do with our recent driving trends. In 2020, during the pandemic, many people were not driving due to no longer commuting to work or school; this resulted in less cars on the road and less accidents.
In 2021, we saw a return to the roads, and this has only increased more in the beginning of 2022. Due to this, accidents have become more likely with the sudden increase of drivers on the road and the costs for repairs and replacements have become more costly. In fact, the National Highway Traffic Safety Administration has reported an increase of 18.4% in the first six months of 2021 regarding fatal crashes compared to the first six months of 2020.
We also saw an increase of car prices in conjunction with the return to the roads. New car prices increased 11.8% and used cars increased a whopping 37.3%; this is due to the lower supply of cars coming out of 2020 because of society’s lowered demand. So, with lowered supply, small accidents can now cause thousands of dollars to repair or replace car parts. Healthcare spending also went up 9.7% with the pandemic, meaning that if you are injured in a car accident, you’ll also be looking at greater medical costs.
All these components lead to raised Auto Insurance policies. It’s good to keep in mind that despite this general increase, Auto Insurance is highly personalized based on your age, where you live, your car, and previous claims history. You can look into Good Driver Discounts that your provider offers to help lower your rate!
WHAT CAN I DO ABOUT HIGH INSURANCE PREMIUMS?
You can mitigate this raise in the insurance market by getting in touch with an agent. If you’re not happy with your current policies, independent agents like those at Wiglesworth-Rindom Insurance will shop the market for you to find the coverage and protection you need.
Wiglesworth advises that “If your agent sounds more like a salesman than a teacher, that should be a red flag. In this insurance environment, you want an agent with the heart of a teacher, who can guide you through your options and will work with you to find solutions. You should be the decision maker, and you can’t do that if you’re not aware of all your options.”
It’s also important to look into Home/Auto Bundles that your insurance provider may offer; bundling can help you save on both your policies!
If you want to get in touch with an independent agent today, get in touch with an agent at Wiglesworth-Rindom Insurance; our agency has been voted the Best in Palm Beach and the Treasure Coast. You can start a quote online now by clicking here, or can call our team at 561-637-2424!