The renewal increases that are coming this year, 2024, will come as quite a shock for most people, with the average rate increase being around 25%. The question I get daily is why. The answer to this has multiple factors. When it comes to auto rates the fact that there are many accidents happening on our roads is one reason. The average speed on the highway has gone up. So, speeding not only causes more accidents it also increases the severity of accidents. This leads to more lawsuits and higher payouts. The cost to repair cars is up, the cost of a rental car is up, the cost to operate a business is up and this leads to higher prices. All these costs are passed on to us as the consumer. Just like with any business, since the cost to operate their business is up so we must pay more for the product.
On the home side most of this has to do with supply chains, the cost of wood and labor is up so the cost to replace any damage to your house is up so that means we have to pay more for the coverage. What’s the answer? First, the State needs to pass laws to slow people down. The State can use cameras to slow people down. Send a ticket in the mail and maybe that will slow down at least half the people out there. Other states use this technology and so should we. Changing the home policy to allow for actual cash value instead of replacement value for the home. We need lawyer reform. All these lawsuits are paid for by us consumers. Again, businesses don’t pay for things, they just raise the rates and the increases are passed off to all of us. I know some of this is controversial but if we want to get the rates down this is the answer. Insurance companies will just leave the State, like they are in California if they can’t make a profit. Right now there are restrictions with what a company will write. Credit scores play a big factor in your rate. How many claims you have had, whether you are at fault or not at fault, insurance companies can charge for all claims. Let’s hope the rates stay steady after this.
Stay safe out there.
