Insurance Costs Skyrocketing? 4 Ways You Can Save Money! 😃
Are you feeling like your insurance costs are burning a hole in your pocket? With prices rising faster than ever, it’s no wonder our premiums have also increased. Let’s unravel the mystery of these increasing bills and explore the ways to find relief!
Costs of Material & Labor
In a nutshell: a major factor that determines insurance rates is how much it costs your insurance provider to cover your risk. Higher costs for labor mean higher costs for total work done to your home or auto, which translates to higher premiums for you.
💸 Expenses to consider
- Car Parts
- Labor & Wages
- Building Materials
- Accommodations (Rental Cars & Hotel Stays)
Insurance providers do a ton of research and calculations to charge the correct amount of premium but with the shifting landscape of the world, higher increases are necessary. From inflation to disruptive events – like pandemics or natural disasters – let’s explore how much of an effect recent events have on insurance companies.
The COVID-19 pandemic sent shockwaves through the auto industry when supply chain shortages created an unprecedented obstacle: insurance companies had to write cars off as total losses because of a lack of repair materials, leading to an alarming number of vehicles deemed irreparable.
For example, one very small–but very critical piece of technology that saw its production come to a crashing halt was semiconductor chips. Semiconductor chips are an integral part of your electrical circuit that enables your car to run. Without this piece, the entire electrical system is compromised – costing them an astounding $210 billion dollars in revenue.
That is the equivalent of 7.7 million vehicles gone in the blink of an eye due to not being able to replace just one tiny piece.
The last few years have seen a steep rise in the number of traffic accidents, with an alarming rate of fatalities across the country. This has been attributed to a multitude of factors – such as distracted driving, reckless speeding, and inadequate infrastructure. According to a fellow Insurance Writer, Carol Pope:
More people died in traffic accidents in 2020 than in any other year since 2007. Additionally, 2020 saw speeding-related crashes increase by 11% and alcohol-related crashes by 9%. (Bankrate)
These sobering statistics have not gone unnoticed by insurance companies. They have responded with premium hikes to cover the increased costs of claims.
In fact, some insurers are now using technology to track driving behavior. Telematics devices are installed in cars to gather data on how a driver behaves on the road. This data is then used to calculate premiums based on the driver’s risk profile.
How to Mitigate Rising Costs
👉 Shop Around
At The Resource Center, one of the best things we can do for our customers is shop the market for them. Independent agents can write through multiple insurance providers. When we see that a client’s rates are going to increase with the company they’re with, we’ll run their information through that company’s competitors to see if we can find someone who offers a better deal without compromising on important protections.
👉 Bundle Your Insurance
Many insurance companies offer discounts for bundling multiple policies. Not just your auto and home insurance, but also any boats, motorcycles, or umbrella policies.
👉 Ask About Safe-Driving and Telematic Discounts
As mentioned before, driving behavior plays a significant role in insurance costs. By driving safely and avoiding accidents, you may avoid higher premiums.
👉 Maintain Good Credit
Believe it or not, your credit score can also affect your insurance rates! Insurers often consider a person’s credit score when determining rates as they believe it is an indication of how likely a person is to pay their premiums on time. Your credit score is also perceived as a general reflection of your lifestyle characteristics.
The Resource Center
Independent Insurance Agency
At The Resource Center, we’re an independent insurance agency. That means we don’t work for an insurance provider like Progressive, Auto-Owners, or Travelers–we work for YOU! Our agents will shop your rates in the market so we can find the best deal for your budget.
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Insurance products are offered through the insurance business The Resource Center Insurance Services, LLC. The insurance products offered by The Resource Center Insurance Services, LLC are not subject to investment advisory requirements. 01947300 – 8/23