Insurance Premium Increase

Understanding the Surge in Personal Insurance Premiums

About The Author

Meriaha MitcheltreeMeriaha Mitcheltree, CISR – Personal Risk Advisor 

As a Personal Risk Advisor, Meriaha specializes in client service, generating new business opportunities while delivering personalized solutions to address our clients’ multifaceted challenges. 

As an insurance advisor, it’s imperative to address the concerning trend of soaring insurance premium expenses affecting families across our community. It’s become increasingly prevalent to witness local news segments highlighting the surge in insurance rates, a topic that has dominated much of our recent client interactions.

What’s driving these relentless increases? Insurance companies adjust rates in response to fluctuating economic factors. Several factors contribute, including heightened claim frequency and severity, escalating healthcare expenses, inflation, and the impact of natural disasters on property and casualty insurance. Additional factors that affect the industry include labor shortages and extreme weather events. 

Construction costs have surged due to rising labor and material prices, impacting the cost of fixing or replacing damaged homes and cars. Federal Reserve data forecasts a 2-3% rise in construction material costs this year, with approximately 430,000 job openings in the construction sector as of December 2023. 

The price index from March 2023 to March of 2024 is a change from 349.189 to 355.140, indicating the increase in overall price of materials and components for construction. These rising costs directly affect the insurance industry, leading to higher premiums for homeowners’ insurance to account for the increased expenses associated with property repairs and replacements and demand for workers. 

Similarly, the automotive industry has witnessed a concerning uptick in fatal car crashes, a 15% increase over the past five years. This trend, coupled with rising repair costs, directly contributes to the overall escalation in auto insurance premiums.

Proactive measures can help mitigate the impact of rising premiums. Regularly reviewing current insurance coverage ensures alignment with evolving needs. Exploring discount opportunities and bundling options with insurance partners may offer relief from climbing insurance premiums and other general expenses.


What Will the Future of Premiums Look Like?

Insurance rates are unpredictable, making it challenging to provide a definitive answer. While premiums don’t change overnight, determining whether they will remain stable, increase, or decrease is uncertain. This answer can be unsettling, especially considering experts’ uncertainty regarding potential reversals or decreases in the near future. 

Despite the uncertainty of the future of insurance premiums, it’s important to remain informed and proactive. We can navigate these challenges together, ensuring the ongoing protection of our community in the face of evolving insurance landscapes. 


Unsure how to operate insurance premium changes? Contact one of our talented Risk Advisors today!


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