If Your Insurance Rates Went Up, You're Not Alone
If you’ve recently received a notice that your insurance rates are increasing, you’re far from alone. 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
Let’s look at why rates are increasing and what you can do to help mitigate these rising rates.
Why Are Insurance Rates Rising?
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
What Can You Do About Rising Insurance Rates?
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
One of the best ways to combat rising premiums is to shop around. Don’t assume that your current provider is offering the most competitive rates. Get quotes from multiple companies and compare coverage options. In some cases, you may find a better deal by switching insurers.
Bundle Your Insurance Policies
Many insurance companies offer discounts when you bundle multiple policies, such as auto and home insurance, with the same provider. Bundling can save you significant premiums and make managing your policies easier.
Increase Your Deductible
If you can handle a higher out-of-pocket cost in the event of a claim, consider raising your deductible. This can lower your premium, as insurers often offer lower rates for customers willing to take on more risk.
Ask About Discounts
Many insurers offer discounts for various reasons, such as having a clean driving record, installing safety devices in your home, or being a long-term customer. It never hurts to ask your provider about any discounts you may qualify for.
Review Your Coverage
Regularly review your insurance policies to ensure that you're not over-insured. For example, if you drive to the office less than you used to, you may no longer need as much coverage for the reduction in miles. Adjusting your coverage levels can reduce your premiums without sacrificing protection.
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. If there’s anything we can do to support you, please reach out.
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.