Insurance premiums on the rise
Most Americans are well aware of the increasing costs of goods and services. Insurance premiums are not immune to these same inflationary pressures. The cost of insurance has increased recently thanks to several external forces that are causing rates to rise across the United States. There are a few factors you should know about when it comes to this rising rate environment, and a few solutions and tools available to help keep your rates within your budget while maintaining the coverage you need.
As with many other industries, the auto industry has seen its share of labor shortages over the last two years. There are currently only 20% of the needed technicians in the workforce compared to the level of demand for auto repair and maintenance. These labor shortages contribute to the cost of vehicle repairs rising. Supply chain issues have also triggered shortages of microchips, which contributed to the tremendous spike in used vehicle prices. These pressures and shortages were exacerbated in 2022 with over a dozen catastrophic weather events that created greater demand for new and used vehicles. When repair costs and car values increase, the amount that your insurance provider has to pay to repair or replace a vehicle goes up, which increases the cost of your auto insurance premium.
Homeowners are also feeling the pressure of increased premiums. The significant increase in the cost of goods like lumber, roofing, and other construction related materials has played a role in premiums going up. Other factors like weather related events, an increase in natural disasters, and a construction industry that is experiencing a labor shortage have not only made it more expensive to replace or fix damage to your home, but the time to repair a home has increased as well. The increased time to make repairs is another driver of increased insurance premiums since an insurance policy pays homeowners for alternative accommodations if they are unable to live in a damaged home. Insurance protects the cost to rebuild a home after a loss so an increase in building materials, labor, and the time an insured is living in alternative accommodations has a direct effect on insurance premiums.
One way to save on auto insurance premiums is through the use of telematics. Telematics help track safe driving habits either through existing technology installed in a vehicle, a device installed in the diagnostic port, or an app on a mobile device. This technology monitors driving habits like miles driven per day and at what time, following posted speed limits, and frequency of hard braking. There is usually a monitoring period of 60 to 90 days after which the driver’s “score” is determined which can help reduce rates or increase safe driving rewards.
Young drivers also have the ability to reduce their premiums through good student discounts.
Your First Tech Insurance Agent is available to help review your current policy. After all, it’s always a good idea to review your insurance policies periodically to ensure you’re still properly protected and receiving the best value. There might also be opportunities to maximize your discounts by bundling policies together, exploring new deductibles and payment options, or even using tools like telematics to determine your driving habits.
Contact the First Tech Insurance Services agent in your area or call 855.855.8805 to get started. They’ll help you balance cost and coverage, so you can relax and enjoy whatever moves you.