In recent years, many consumers have noticed a significant uptick in the cost of both auto and home insurance premiums. This increasing trend in insurance expenses isn’t arbitrary, but a result of several converging factors that are shaping the insurance landscape. From natural disasters exacerbated by climate change to advancements in technology making vehicles more expensive to repair, and inflation to evolving policyholder behavior, the rationale behind these rising costs is multifaceted.
What’s driving auto rate increases?
- Used car prices up 35% due to new vehicle shortages.
- Vehicle parts & equipment costs up 10%
- Supply chain issues & labor shortages increased claim costs.
- Rising number weather related disasters.
- Increase in auto accidents and fatalities up 18.4%.
What’s driving home rate increases?
Inflation and other trends are driving up the cost of home insurance premiums. Here are some of the factors behind these increases:
- Supply chain shortages have increased the cost of claims.
- 415,000 job openings in the construction industry, raising labor costs.
- Home construction materials up 22.7% overall, increasing the cost to repair homes.
- Asphalt roofing prices up 22.6%.
- Shortages increased claim costs.
- Lumber prices up 21.8%.
- Rising number of weather-related disasters.
