Insurance rates are rising

Insurance is important to have. You never know when a falling tree will damage your home, when your car will be rear-ended, or when a delivery person will trip and fall on your front porch. Without insurance, you could be responsible for covering the costs of all these claims.

But many people today are finding their pocketbooks squeezed by rising insurance rates.

In 2023, average homeowners insurance rates increased by more than 11%¹ and rates have continued to climb in 2024-2025. Rates for auto insurance are increasing even faster, jumping by more than 20% during that same period.²

Why are insurance rates increasing?

Insurance works as a pool of money, so when claims cost rise, the premium needed to pay for those expenses rises as well. This means that insurance companies are raising rates to keep up with rising costs. In fact, in recent years, they’ve been paying out more in claims than they have been collecting in premiums. According to the Insurance Information Institute, insurers last year paid out, on average, more than $1.10 for every $1.00 in premiums they collected.³

What’s behind the numbers?

There are many reasons for increasing insurance rates:

• Inflation is one of the biggest factors. Costs of home and vehicle repairs, which includes materials or parts and labor, have gone up. For example, between May 2023 and May 2024, car repair costs rose by more than 7%.⁴
  
  
• Newer vehicles come with more sophisticated technology which is more expensive to repair. Things like exterior cameras and sensors can be easily damaged in a minor fender bender but are costly to replace. Plus, repairs are taking longer⁵, which adds additional costs for the insurer.
  
  
• Higher rates of auto theft have also led to higher costs for insurers. In 2023, vehicle thefts topped 1 million for the second year in a row.⁶
  
  
• Medical costs are rising—the cost of hospital care jumped by more than 7% between May 2023 and May 2024⁷. This means that when you or someone gets hurt in an accident, the cost of care is more expensive.
  
  
• Severe weather and natural disasters such as floods, tornadoes, hurricanes, and wildfires are increasingly damaging properties. Average natural catastrophe insured losses have nearly doubled over the last decade.⁸
  
  
• High costs of litigation and skyrocketing personal injury judgements mean insurance companies are paying more for liability claims.
  
  
• Insurance companies are being more selective about their customers and what they’ll insure. They’re dropping coverage for high-risk properties, shedding risky policies because of tougher underwriting. Rates go up for when the available market shrinks.
  
  
• Insurance rates had been relatively flat over the past decade, rising just a few percentage points each year, which makes recent increases even more noticeable.

What you can do about it

It’s not just you—insurance rates are rising for everyone, even if you have good credit, a good driving record, and few to no claims. But there are things you can do to manage your insurance expenses. Use the expertise of an insurance broker to help you shop around for the best coverage at the best rate. Our team of professionals can help you compare quotes and switch carriers if it makes sense.

• You can increase your deductibles which will reduce your premium.
  
  
• Bundle your policies; purchase more than one type of insurance from the same carrier, like auto and homeowners, for example. Bundling typically saves you money, both in premium costs and in other ways as well. For example, if both your home and car got damaged by a single incident, like a house fire, you would save by bundling because you could file a single claim and pay just one deductible.
  
  
• Check coverages to make sure you need everything you’re paying for. For example, if you are an AAA member, you may not need to pay for towing coverage under your auto insurance.
  
  
• Look for discounts that can help you save. There are many out there, such as discounts for safe driving or home security systems, auto pay discounts, student away at school or military discounts, and more. Again, an insurance broker can help you find these types of savings.
  
  
• Ask about customer retention discounts; some insurers offer lower rates based on the number of years you’ve been a customer.
  
  
• View insurance as protection against catastrophic loss and limit the number of claims you file, which could raise your premium or even prompt cancelation of your policy.

Here’s what NOT to do

Collision covers the cost to repair or replace your vehicle if it is damaged in an accident. You’re covered even if you hit a pothole or a tree instead of another vehicle. This coverage is typically required if you have an auto loan or a lease. If you have a new or expensive vehicle, or if you rely on your vehicle and can’t afford an expensive repair bill if something happens, this coverage may be worthwhile to have even when you have no loan.

But whatever you do, don’t drop coverage.

A survey by the Insurance Information Institute last year found 12% of homeowners⁹ and 14% of drivers¹⁰ had no insurance— putting themselves, their families, and their assets at risk. An important feature of insurance is liability coverage, which protects you if someone gets injured on your property or if you cause an accident that injures others. If you have no insurance, a single accident could wipe out your entire net worth.

Vehicle, home, life, and umbrella insurance protects you from financial loss, providing a safety net for you and your family if something happens. There are many ways to make insurance work for you, even if rates are increasing. Let us help by finding the right policies for you and your needs.