Here at Rockwall Insurance, we know that it’s an unfortunate reality that insurance prices have been trending upward lately. Those who are looking to buy home insurance policies may be concerned about this trend or wondering why it is taking place. We would like to shed some light on what’s happening so that you can understand the pricing structure and what type of insurance is best for you.
First of all, insurance agencies are simply given prices by the policy carriers. Some of these carriers have increased their prices by as much as 30%. That increase is impossible to absorb and it simply means that the rates passed on to the end customers are going to be higher.
All prices are rising
There are numerous factors that play into this, but you’ll find that prices are rising all across the United States. Lumber costs jumped by 14%. Used cars went up by 55%. There are supply chain issues everywhere. Home prices have tripled. Essentially, everything is beginning to cost more and the insurance industry isn’t immune from that. It’s also worth noting that the increasing cost of homes means that these insurance policies cover more expensive properties than they used to. The prices have to go up because the cost of materials and labor to repair damaged homes is also skyrocketing.
Car accidents are increasing
For those looking for auto insurance along with their home insurance in Rockwall, they’ll find that auto insurance has also increased. A big reason for this is that car accidents have been increasing after the pandemic. There was a severe decrease in total accidents – even though car accident fatalities actually increased – but that has been washed out now that people are returning to the office and traveling more. Essentially, there’s just far more traffic on the roads than there has been for the last two years and that’s going to lead to an increase in accidents, property damage, injuries and much more.
It’s also worth noting that the increase in fatalities is still true in 2022. They’re roughly 14% higher now than they were before the pandemic. More severe accidents are more costly to cover, and this also increases the rates.
Weather events are getting worse
You’ll find that weather events are also causing a lot more claims. Some carriers got catastrophic event claims roughly every two weeks last year. Inclement weather can lead to things like flooding, tornadoes, hurricanes, hail, severe heat, drought, severe cold and much more. In some ways, the weather is simply becoming more volatile due to climate change, so you’re seeing big swings between the extremes. All of this can lead to a lot more catastrophic incidents, which means that insurance needs to be prepared to cover the cost of a total loss.
Even weather events that don’t seem nearly as catastrophic as a hurricane can have a major impact. For instance, just 10 minutes of heavy hail can cause severe damage to roofs, automobiles, windows and much more. Many people will have major claims after events like this, even if the event happened very quickly. Don’t underestimate the sheer amount of damage that can be done by the weather in a short time. This is why it’s so important to have excellent home insurance in Rockwall.
The perfect storm
In terms of insurance rates, this has all created something of a perfect storm. Damage is happening more often, whether that means homes are being ruined in storms or cars are being involved in accidents on the highway. The severity of the damage is also increasing, which leads to the increase in fatal accidents or major catastrophic home claims. At the same time, the cost of parts and materials has increased dramatically, so it costs more to fix the damage and pay out those claims. Labor costs and wages have also gone up, which only adds to the increase in costs at a time like this.
You certainly still can get the insurance that you need, and you can make the argument that it’s more important now than ever. Here at Rockwall Insurance, we’d be happy to meet with you and talk about all of your options. We’ll work hard to find a plan that fits your budget and gives you and your family the coverage you need, using our expertise and knowledge of the insurance industry. Please get in touch with us today.