There are several, biggest factors impacting home and auto insurance to start 2023. The home insurance market is currently being challenged by three significant market conditions discussed below. If you have any questions, contact our office at 413.475.7283 or Complete our online quote form today!
Inflation wreaks havoc on all types of consumer goods and services and insurance is not immune to its damage. The cost of insurance goes up during periods of inflation in response to the cost of things that impact claims and premiums. Customization of insurance coverage is key during times of high inflation.
Increase in Natural Disasters
Tracking data on natural disasters reveals a dramatic increase in catastrophic events, especially from 1980 to today. Similar to the inflation model, as costs of repairs increase with the frequency of natural disasters, the cost of insurance premiums will follow. In addition to homeowners insurance premiums going up across the country, many property owners are not properly insured against catastrophic events like floods. With climate change causing an increase in catastrophic weather events across the country, the environmental impact to the insurance industry will only become more severe. It’s important for consumers to understand what their policies do and do not cover when it comes to natural disasters.
Relocations and Rate Increases
A rise in remote work opportunities encouraged many Americans to move, during the height of the pandemic and continuing into 2022. As more people got mortgages in states where they hadn’t previously lived, many homeowners got their home insurance from companies they hadn’t previously done business with. While almost every state in the country saw home insurance premiums increase, lower taxes, housing prices and the overall lower cost of living made the southeast very attractive to budget-conscious consumers.
The average American driver will pay nearly $1,900 for car insurance in 2023, as insurance rates continue to rise across the country. By the end of 2023, Americans will pay 16% more for car insurance than they did at the beginning of this year. Auto insurance rates increased by 9% throughout 2022 and will likely rise another 7% in 2023, with the average American spending $1,895 on auto insurance by year’s end. Many of the factors that contributed to rate increases in 2022 will continue to be in play for American drivers in 2023. Annual data reflects the state of the insurance industry, and the new report projects that higher driving rates, more severe accidents, inflation’s impact on vehicle repairs and medical costs, and the potentially increased frequency of wildfires and hurricanes will continue to be the key factors contributing to rate increases next year.
Contact Encharter Insurance at (413) 475-7283 or visit www.encharter.com to review your homeowners and auto insurance coverages and look for ways to save money on your current insurance policy.
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Source: https://www.propertycasualty360.com/2022/11/29/the-biggest-factors-impacting-home-insurance-heading-into-2023/ and https://www.businesswire.com/news/home/20221207005191/en/New-Insurify-Report-Americans-Will-Pay-16-More-for-Car-Insurance-by-the-End-of-2023