Insurance and inflation
When determining insurance premiums, insurance companies look at a variety of factors including industry trends like number of claims and costs to repair vehicles and homes. If those costs increase, the price of insurance premiums will likely increase as well.
Unfortunately, due to inflation these costs are increasing. Building materials for homes are more expensive, there’s a chip shortage driving up the cost of cars, and there’s also a labor shortage. These factors mean the cost to repair your home and vehicle have increased in the event of an insurance claim.
Why did your insurance rate go up this year?
Here are the challenges facing the insurance industry today that are contributing to increased costs:
- Housing material and labor costs have increased
Lumber and other construction materials have spiked in price due to less availability making the costs to repair and build homes more expensive. At the same time, we’ve also seen an increase in the cost of skilled labor and the construction industry is down about 200,000 skilled trade workers1. These factors have likely increased your property insurance costs.
- The chip shortage
A crucial component of cars built today, fewer available chips results in more expensive cars, and as the cost of cars rise, so does the cost to repair if an accident occurs.
- Auto repair and labor costs have increased
With the chip shortage, more people are keeping their old cars on the road longer, needing more repairs. The increased demand for car parts combined with supply chain issues, are leading to inflated car part costs. Auto repair shops are also experiencing staffing shortages and increased labor costs which are also driving up the costs of repairs.
If your insurance costs are increasing due to inflation, you may be wondering, how can I lower my premium? The good news is that AICPA endorses Liberty Mutual and AICPA Members can benefit from several home and auto discounts.
How can I lower my premiums?
How to save on your home insurance:
- Get rewarded for being a safe homeowner by remaining claims-free for 5 or more years2
- Explore payment options like automatic payments or paying for the year in full
- Bundle with your auto insurance and save
How to save on your auto insurance:
- Maintain a good driving record or participate in a safe driving program like RightTrack
- Explore payment options like automatic payments or paying for the year in full
- Bundle with your home insurance and save
If you’re not a Liberty Mutual customer, get a quote or ask your insurance company how they can help you save.
Keep in mind, with Liberty Mutual you get customized insurance so you only pay for what you need.