Why insurance prices keep going up.

The insurance industry is complex, and, thanks to these many moving parts, it can be quite volatile, too. Here are just a few expected and emergent factors influencing how much you ultimately owe:

Social & Economic Inflation: You’ve probably noticed that just about everything is getting more expensive these days! From supply chain issues to international trade conditions, the reasons for this are too complex to address in a blog alone. But at the end of the day, when the price of a car bumper increases, your insurance provider will have to pay out more to replace yours after an accident. Couple that with a rising number of claims in general, and you’ve got a recipe for higher prices across the board, since, unfortunately, it isn’t just your claims affecting your own insurance bill.

Severe Climate Events: Another reason claims — and, consequently, prices — are on the rise is due to the increased incidence of destructive weather events. Some of these, like hurricanes in Florida, are expected, but have still been getting more intense, while other phenomena that were once considered rare, like tornadoes in Michigan, are becoming more common. And that increased risk comes at a universal expense.

Rising Reinsurance Prices: Yep, insurance companies have to pay for insurance, too. And with their insurance rising from 30–50% in just one year, that cost ends up getting passed on to individual policyholders, too, so insurance companies can stay profitable.

What you can do about it.

While there isn’t much you can do about these above factors, you can still do your best to approach your insurance policy with a strategy to cut costs without sacrificing crucial coverage.

Double-Check Your Deductible: It never hurts to give your current policy a checkup to make sure what you’re paying still aligns with your reality. Consider your budget, compare deductibles from different insurance companies, and think about how often you file claims — if you have a history of filing frequent claims, you may want to choose a lower deductible.

Insure What’s Important: Here at LMIA, that’s our guiding philosophy. While comprehensive coverage can give you greater peace of mind, it can put a lot of stress on your wallet, too. That’s why it’s important to consider whether you really need to insure everything, or only the things that would be expensive to fix or impossible to replace.

Work with an Expert: The world of insurance can feel overwhelming — but it doesn’t have to be. By partnering with an independent agency, like LMIA, you can enlist some help to find the best product from all the carriers we partner with. We’ll listen to your story and take a consultative approach, to make sure you understand the process and feel good about the coverage you’re paying for.

As insurance prices continue to rise, make sure you’re ready to rise to the occasion with a well-researched plan. If you’re looking for a seasoned ally who will do the shopping for you, give us a call.