Insurance rates set to increase again

Insurance rates are increasing with all insurance companies in Connecticut and across the country.

Historic inflation, weather-related losses and increased volume of claims being reported to insurance companies have reached unprecedented highs. As a result, costs are rising across the country drastically impacting insurance companies and insurance rates for customers nationwide. Your neighbors, coworkers, friends, family, your insurance agents, the people you watch on tv - everyone is seeing large increases on their insurance policies.

Your insurance policy is designed to help make you whole again if you experience a loss of your home or vehicle. In the current national environment, you've probably heard that inflation and weather-related events are impacting all industries. This includes insurance. Insurance deals with repairing and replacing, and the cost for repairing and replacing have all increased drastically for insurance companies. 

Imagine you had a fire where you lost your entire home. The cost of materials needed to rebuild the home are up over 26% over last year. In addition to that, 90% of contractors are short on staff resulting in 88% of firms experiencing project delays. Because of this, it may cost more and take longer for contractors to rebuild your home, which could mean your coverage limit is insufficient.

Now think about this, you had a fire where you lost your entire home. Your policy premium was only $1,000 and the insurance company paid out $500,000 for the loss of your home...Where did the money come from to rebuild your home? The insurance company paid for that loss, and you only paid $1,000 for the insurance policy. Insurance companies are taking on a lot more than ever with losses. Insurance companies have to raise rates so that if you have a covered loss, they can make you whole again for that loss.

Costs have increased which have caused your home's replacement value to increase, therefore insurance companies are increasing the home's replacement value on your home insurance policy (Dwelling Coverage A), so that your assets are adequately protected.

Big natural disasters have always been a challenge for insurance companies, because when those events happen, so many people are impacted at the same time, and losses can be so severe that they really have the potential to bankrupt a company. Now, these natural disasters are happening more frequently and impacting insurance companies severely.

With Auto policies, all insured drivers share the increasing cost of insurance as well. That is why your rates tend to go up every time your policy is renewed, regardless of whether any individual factors, like your driving record or location have changed.

Insurance costs are rising!

Historic inflation, weather-related losses and increased volume of claims being submitted to insurance companies have reached unprecedented highs. As a result, costs are rising across the country impacting insurance companies and customers nationwide. Many companies have announced that they're no longer going to be writing home and auto insurance policies due to the increase of losses and their inability to keep up. Insurance costs are increasing at historic rates from increased claims payouts due to reasons such as:

 Home insurance

• These weather events cause insurers to pay out a higher number of claims, which tend to be more expensive and less predictable. As a result, insurance companies have to raise rates to keep pace.
• Increased cost of materials
• Increased replacement costs
  
• Increased repair costs
  
• Increased labor costs
  
• Supply chain and shipping delays
  

Auto insurance

• Vehicles today cost more to repair and replace due to all the added technology and features now found in cars.
• Higher prices for used and new cars
• Vehicle thefts are increasing.
• Theft of vehicle parts are increasing. Example: catalytic converters
• Increasing number vehicle accidents from distracted driving
• Increased repair costs
  
• Increased costs of replacement parts
• Increased labor costs
  
• Rise in the cost of car parts
  
• Increase in rental car costs.
• The cost of uninsured or underinsured drivers is passed on to the rest of us through higher premiums. So, always make sure you carry excellent coverage on your auto insurance policy, to protect yourself and others.

Ways to offset costs

Increase deductibles on your home & auto insurance policies

A deductible is the amount of money you’re responsible for paying before your insurer covers a loss. Having a higher deductible could lower your rate. And having a lower deductible puts more risk on the insurance company to cover the loss, which can lead to a higher rate for you.  A deductible of $2500 is becoming increasingly more common with home policies and $1000 deductibles with auto policies.

 Inform your agent of any updates to your home:

• Do you have a new roof on your home?
• Have you replaced your furnace?
• Have you updated electric or plumbing in your home?
• Have you installed a wired-in generator, that goes on automatically during a power outage?
• Do you now have a security alarm or cameras on your home.
• Do you have a water/leak detection system or temperature monitoring device?
• Have you updated a kitchen or other rooms?
• Have you finished an unfinished area or added square footage to your home?

Inform your agent of any vehicle loans that have been paid off. If you have a vehicle loan, most likely you are carrying Loan/Lease (GAP) Coverage on your auto insurance policy. Once a vehicle is paid off, the bank should no longer be listed on your insurance policy, and you no longer need to carry Loan/Lease (GAP) coverage. Banks only notify insurance when the bank information needs to be listed on an insurance policy, but they do not notify when a loan is paid off. It's up to you to notify your insurance of loans you no longer have.

Bundle your home & auto together. Do you have your home insurance here, but your auto insurance somewhere else, or vice versa? Let us quote your home AND auto insurance. We represent many insurance companies, so let us do the shopping for you. One of the main benefits of bundling is that companies often offer discounts if you hold several policies with them, so it can save you money. In fact, most carriers now want to insure both policies and will automatically add a multiple-policy discount onto both policies in return, which allows you to save money on your total cost of insurance.

Take advantage of additional discounts, such as automatic payments, or the convenience of online self-service portal and paperless, to help ensure that you don't experience any disruptions due to mail delays and you can access your policy easily.  Paying a policy in full can save you money. Many carriers offer discounts for auto policies that are paid in full. Paying in full will also save you from having to pay billing fees.

Increase Credit Score. Insurance companies do use credit as one of the many rating factors. A higher credit score decreases your car insurance rate, often significantly, with almost every insurance company and in most states. In Connecticut, drivers with no or bad credit pay more on their premiums than drivers with excellent credit. You can also demonstrate financial responsibility by maintaining car insurance with no gaps in coverage. Letting your coverage lapse could result in a higher rate when you get your next policy.

Claim Prevention. Numerous recent claims can drive up your premiums. That's one reason why it sometimes makes sense to pay out of pocket rather than file a claim, especially if a claim won’t get you much more than your deductible. There are things you can do to avoid submitting claims. The following are some examples, but not limited to:

Safe Driving

• Safe driving = less accidents = less claims = better premium.
• Stay away from distracted driving.
• Consider a telematics program if your carrier offers one.

Safeguard your home!

• Update the roof on your home to prevent leaks & water damage. Repair any damages and ensure that no roof shingles are loose.
• Trim trees around your home to prevent tree damage to your home. Prevent tree overhang.
• Update plumbing & electrical in your home to avoid future water or fire damage to your home.
• Keep your chimney and dryer vent clean.
• Make sure your home's electrical system is up to date.
• Take precautions to avoid frozen pipes.
• Own and learn to use a fire extinguisher. The kitchen is the most common origin of house fires, so having one nearby is advised.
• Install smoke alarms. These are fire-protection devices that detect and warn homeowners when smoke is detected. Conduct frequent check-ups to review the status of your smoke alarms.
• Regularly clean your gutters. Blocked gutters can cause water damage to the interior and exterior of your home.
• Use downspout extenders. 
• This allows you to divert the flow of water away from the structure and foundations of your home.
• Conduct home repairs promptly. Make minor repairs frequently rather than having a large loss then having to file expensive and time-consuming claims.

Adequate Insurance Is Necessary for All. Uninsured and Underinsured drivers cost all of us more in premiums. It doesn’t take much math to conclude that purchasing state-minimum car insurance leaves drivers barely protected. Drivers who buy state-minimum insurance are merely complying with law. They are not protecting themselves or other drivers. This is an incredibly dangerous position to put oneself in. If you have state-minimum car insurance and are deemed at fault in an accident, you may be liable for all expenses not covered by your policy. You may be expected to pay out of your own pocket to cover the difference between your insurance and the other driver’s actual expenses. An attorney or a person injured in the accident could look to you personally to contribute to resolve a claim. The other driver can sue you, seize your assets, and have your wages garnished. Don’t wait for a bad outcome to happen and wish later that you had an adequate amount of coverage.