07 Jul Increasing Insurance Rates
If your auto and homeowner’s insurance premiums have risen significantly this year, you are not alone. Auto rates in particular have jumped significantly and unfortunately, premiums are expected to continue to rise. The Wall Street Journal recently reported rate increases for selected insurers and showed Allstate increased rates by 40% in Georgia and State Farm increased rates by 11% in New York. On average auto insurance rates were up more than 15% in May from the year prior which far outpaces inflation during that time. Increases are expected to continue through the end of 2024.
Insurers are implementing premium increases due to losses they have incurred. Since the pandemic, the quantity and cost of auto claims has risen. There has been an increase in the number of accidents, repairs costs and medical costs. If you are someone who hasn’t filed a claim in many years (or ever), it can be hard to continue to watch your premiums increase at a rapid and perhaps unexpected rate.
There are a few things you can do to potentially reduce your premiums without sacrificing coverage:
- Bundle policies together if possible. The more policies you have with the same insurer the more discounts you will receive. Consider bundling your home, auto, umbrella, etc.
- Many insurers will provide discounts for policies paid in full either for 6 months or an entire year. This is a large outlay of cash all at once, but if you can afford it, you can save a significant amount of money. If this would make your cash situation tight, try to save a little bit each month so when your premium is due you will have the cash on hand. Using autopay for monthly payments may provide a discount as well.
- Make sure the annual mileage reported to your insurer for each vehicle is accurate. For example, we used to drive our truck and car every day, but now our truck is only driven a few times a month. Making the adjustment in annual mileage reduced the premium for that vehicle.
- Consider increasing your deductible. You should only do this if you have a sufficient emergency fund to cover the deductible and you are comfortable with it. Some people value the security of a low deductible and that is okay.
- Shop your rate. Although insurance rates are up across the board, you may still be able to find a better deal. Just be sure you are comparing apples to apples and don’t settle for inferior coverage.
These are just few ideas that may help you have on your auto premiums- your agent may have some additional options to help you as well. We don’t recommend resorting to cutting or reducing important coverages like collision, comprehensive or uninsured/underinsured motorist to save on premiums. That could quickly lead to regret in the event of an accident.
We have helped many clients analyze their home, auto, and umbrella policies over the years. If you would like us to take a look at your policies, don’t hesitate to reach out to us!