If you’ve noticed a significant dent in your wallet due to recent insurance premium hikes, you’re not alone. A rate surge is affecting people nationwide, particularly in home and auto coverage.
But why is insurance becoming more expensive? And is there an end in sight for rate increases? Let’s explore how national trends are impacting Pennsylvania residents and how you might be able to mitigate some of these cost increases.
Why Is Insurance Getting More Expensive?
Several trends are contributing to insurance rate increases nationwide, and those national trends are affecting insurance costs here at home.
Catastrophic Events
We see catastrophic events, including hurricanes, wildfires, and floods, on the news almost every night. More than two dozen severe weather events in the U.S. last year caused billions of dollars in damages, and forecasts predict similar (or even worse) trends in 2024. These events have a massive impact on the insurance industry, resulting in a surge of claims. Insurance companies compensate for more claims by raising premiums. While residents in states like Louisiana and Florida, hit hardest by severe weather events, will see the biggest rise in rates, all insurance holders will feel the impact.
Rising Repair Costs
Even minor accidents and property damage can lead to a big repair bill. The cost of labor, materials, and replacement parts has climbed steadily in recent years, driven by inflation and supply chain disruptions. That means insurance companies have to pay more to process claims, and they pass those increased expenses on to policyholders.
Impact of Inflation
Inflation has impacted almost every facet of modern life, and insurance rates are no exception. The rising cost of living affects everything from administrative expenses to operational costs for insurance companies. To stay profitable, the companies have to adjust their premiums. Many insurance companies are playing catch-up from losses they’ve experienced due to inflation in previous years. Some insurers currently pay out an average of $1.10 for every dollar they make on premiums.
Which Insurance Rates Are Rising the Most
Many Pennsylvania residents have noticed an insurance rate increase across the board, but two types of insurance have been impacted most:
Home
Nationally, the average homeowner’s insurance premium is expected to reach an average of $2,522 by the end of the year. That’s a 23% increase compared to last year. Pennsylvania residents haven’t seen the same drastic rise as other parts of the country. For example, Louisiana has seen home insurance rates increase by an astounding 63%. This dramatic jump is due to the state’s vulnerability to hurricanes and other catastrophic events. While our rates locally haven’t increased as much, you’ll still see a jump in your monthly premiums.
Auto
Car insurance rates have climbed by an average of 26%, translating to an average premium of $212/month. Like homeowners insurance, increased repair costs, and severe weather events are behind these increases. Regions prone to higher theft rates, vandalism, hailstorms, and floods will see the most significant increases.
Remember, these are national averages. Your specific circumstances will impact your insurance rates in Pennsylvania.
How to Mitigate Insurance Rate Increases
While insurance rate increases can be frustrating, there are things you can do to minimize the impact they make on your monthly budget. Here are some tips to help you keep costs down while maintaining an appropriate level of coverage.
- Shop around. When it’s time to renew your insurance policy, take time to shop around and compare quotes from different insurers. An insurance broker can help you with this process and secure competitive rates from reputable carriers.
- Bundle your policies. Many insurers offer discounts for bundling your home and auto insurance together. Take advantage of these bundling options to unlock significant monthly savings.
- Review your coverage regularly. Your insurance needs will change over time. Reviewing your coverage, including your limits and deductibles, every year will ensure you’re paying too much for coverage you don’t need. A broker can help you review and adjust your insurance policies to optimize value.
Get Competitive Policies at Great Rates at Eber & Associates
Managing insurance rate increases doesn’t mean you have to go without essential coverage. You can safeguard your home, auto, and other assets by finding the right balance of protection and affordability. Eber & Associates can help.
Our experienced brokers will work with you to understand your unique circumstances and coverage needs. We’ll shop around and compare quotes for you to find the best coverage at the best price. Then, we’ll help you select the right policies so you have the protection you need without overpaying.
Fight rising insurance costs. Contact Eber & Associates today for a free consultation and insurance quote.
