If Your Insurance Rates Went Up, You’re Not Alone | Insight From Our Advisors on Navigating Rising Rates
If you have noticed a jump in your insurance rates, you are not the only one. The average cost of car insurance has jumped more than 20% in the last year.1 The average homeowner's insurance premium rose 7.6% in 2021 from 2020.2 The countrywide average auto insurance expenditure increased 1.4%.3 If your rates increased, you may be left wondering why and what you can do to help lessen the effects of these rising rates.
Why Are Insurance Rates Rising and What Can You Do?
Insurance rates are influenced by various factors, most of which are beyond your control. Here are just some of the reasons why your premiums might be going up:
- Inflation
- Rising costs of living
- Increased frequency and severity of natural disasters
- Supply chain disruptions
- Global unrest
- Increase in claims
- Medical advancements
While it may seem like rising insurance rates are out of your hands, there are steps you can take to ensure that you're still getting the best value for your money.
Shop Around for Better Rates
To combat rising insurance rates, it requires a proactive approach centered on comparison shopping. Your current insurance provider might not automatically offer the most competitive rates in the market. By taking the time to research and compare different insurers, you open yourself to potentially significant savings. Many consumers discover more attractive deals and better coverage by being willing to switch providers. This strategy empowers you to make an informed decision based on comprehensive market research rather than remaining passively committed to your existing insurance plan. Requesting quotes, comparing detailed coverage, and being prepared to change insurers can lead to meaningful cost reductions and potentially improved insurance protection.
Bundle Your Insurance Policies
A number of insurance companies offer attractive discounts when you bundle multiple policies, such as auto, home, and even renters or life insurance, with the same provider. By combining these policies into one package, you not only receive a reduction in your overall premiums but also gain the convenience of managing all your coverage under one roof. This can make it easier to keep track of your policies, payment due dates, and ensure that you’re getting the best value for your insurance needs. Bundling can be a smart and cost-effective way to simplify your insurance experience while enjoying substantial savings.
Increase Your Deductible
Should you need to file a claim and you can handle higher out-of-pocket expenses, you might want to think about increasing your deductible. By opting for a higher deductible, you take on more financial responsibility in the event of a claim, which can result in a lower premium. Insurance providers often reward customers who are willing to assume more risk with reduced rates. This can be an effective way to lower your monthly or annual premium payments, but it’s important to ensure that you are financially prepared to cover the higher deductible if a claim arises. Carefully balancing your comfort level with risk and potential savings can help you find a policy that fits both your budget and your needs.
Ask About Discounts
Many insurance companies offer a range of discounts for different reasons, including maintaining a clean driving record, installing security systems or safety devices in your home, or being a loyal, long-term customer. These discounts can add up over time and help reduce your overall premium costs. It’s always a good idea to reach out to your insurance provider and ask about any discounts you might be eligible for, even if you think you may not qualify. Insurers often have various offers or incentives that may not be immediately obvious, and simply inquiring about them could lead to savings you weren’t aware of. Taking a few moments to explore these opportunities can potentially result in significant financial benefits.
Review Your Coverage
It’s important to regularly review your insurance policies to make sure you're not paying for more coverage than you actually need. Over time, your circumstances might change, and those changes could impact your insurance needs. For instance, if you’ve started working from home or are driving less frequently, you might no longer need the same level of coverage for your car as you did when you were commuting daily. By reassessing your policy and adjusting your coverage levels to better match your current situation, you can potentially lower your premiums without compromising on the protection you need. Taking the time to evaluate and fine-tune your coverage can help ensure that you're not over-insured and that you're only paying for what you truly require, ultimately saving you money while still maintaining the appropriate level of coverage.
Paying for insurance is just one of the many financial pieces of the puzzle that individuals have to consider. While increasing premiums might seem like a lost cause and out of your control, you can do a few things to ensure you’re still getting the best rate. And remember, your financial professional is here to help with life’s big transitions. Please reach out if you have any questions.
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- https://www.bls.gov/news.release/cpi.nr0.htm
- https://www.iii.org/fact-statistic/facts-statistics-homeowners-and-renters-insurance
- https://www.iii.org/fact-statistic/facts-statistics-auto-insurance/
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.