Why Did My Home and Auto Insurance Premium Increase SO Much?
The insurance market is disrupted, and insurance companies are reacting harshly and quickly. Inflation is crippling insurance companies as carriers are losing pennies for every premium dollar they bring in.
If you have not already seen an increase in your renewal premium, it is coming. We want to help prepare you, set expectations, and help you understand what is causing the increases and what we are seeing on our end that is affecting you and your pocketbook. We want you to know that it is not specific to you, and it is affecting everyone with every carrier. Rapidly increasing insurance rates have made national news headlines all around the country.
Fewer and fewer companies are doing business in the DFW area. Every week we are notified of another carrier issuing a temporary moratorium, leaving the DFW market completely, increasing deductible minimums, or instituting new restrictive guidelines on issuing new business to restrict the flow of new business policies. This means less options for us to shop on your behalf. Renewal rates are coming in with historical percentage increases. A fifty or sixty percent rate increase is the current normal. Every insurance representative we speak to has one answer to why premiums are increasing so drastically – cost of claims.
The cost to rebuild homes and repair vehicles has drastically increased due to supply chain issues and the cost of materials. With all the new technology embedded in vehicles such as cameras, monitors, and sensors, the cost for seemingly simple repairs such as mirrors or a windshield has tripled. In addition, medical costs and litigation are also increasing at historical rates.
When will it stop?
Insurance companies do not have an answer to this except not through 2024. It will eventually slow down but not for the foreseeable future.
What can you do?
Review your coverage and deductibles: We never want to remove coverage from our policies without careful consideration but sometimes reviewing your coverage and considering calculated risk verse cost is beneficial .
Increasing your deductibles is one of the best ways to reduce your costs. Are you willing to self-insure for the smaller claims that may occur? Take the time to review the optional coverages you are paying extra for.
Consider Telematics: Most auto insurance companies offer some sort of monitored driving experience for a discount. Each company discount and program requirements are unique. Explore the cost savings and benefits.
Is it time for a New Roof? Credit score and roof age are the strongest rating factors for home insurance in Texas. If your roof is older, have a certified roofer come and inspect it.
Discounts: Make sure you are receiving all the discounts you qualify for – good student, low mileage, etc.
Bundle Discounts: It doesn’t always make sense to bundle but it also doesn’t always make sense to unbundle. Moving your auto insurance after six months may save you some money in the short term but at renewal time, it may increase your home insurance renewal rate twice as much. Some carriers are not allowing clients to move their auto policies back. It is best to shop your home and auto together, so you know the whole financial picture. Carrier tenure is a rating factor as well.
Good Driving: It may seem self-explanatory but avoiding claims and tickets is the best way to keep your insurance down. Everyone knows At-Fault accidents drive up rates, but speeding tickets can be just as bad. If you do receive a speeding ticket, do what you can to avoid it going on your record.
Claim count: Every time your insurance company pays you – It goes on your official C.L.U.E. report – even towing and glass claims. The small claims may not increase your rates immediately, but they do go towards your “claim count” and having lots of small claims can make you ineligible with some carriers and in some cases – get your policy non-renewed. Pay the small claims when you can and keep your deductibles high for a rainier day.
Policy Lapses: You should not let your home or auto policy lapse for any amount of time. Carriers are not as affable to reinstating policies and some are looking for any excuse to cancel policies in areas like DFW where losses are high. Also, any amount of a lapse can make you ineligible for new coverage with some carriers, giving you even less options to shop for cost savings.
All of us at Insurance New Mexico are home and auto owners as well and we all are navigating this together and feeling the pain of rate increases in the pocketbook as well and we will all get through this together! Reach out to us today review your coverage and your options.