Navigating Insurance Inflation: Understanding the Factors Driving Up Premiums

Inflation isn’t just affecting the cost of groceries or gas—it’s also putting pressure on insurance premiums. Like any other industry, insurance is subject toinflation. At Schomp Insurance we want to make sure I clients understand rate increases and help them make informed decisions about their coverage. In this article we will highlight factors contributing to what we call “Insurance Inflation. “

Factors Driving Insurance Inflation

Industry Trends and Costs: Insurance companies consider various factors when determining premiums, including industry trends, claim frequency, and the cost of repairs. Economic increases have effected the cost of home building materials, auto repairs, and also cinsideres supply chains issues. Additionally, a persistent labor shortage further complicates the situation.

Driving Behavior Post-Pandemic: The 2020 pandemic significantly altered driving behavior, with fewer vehicles on the road during lockdowns. However, as restrictions eased, driving habits changed, leading to riskier behavior on the roads. This shift has resulted in an increase in auto accidents, driving up auto insurance costs.

Natural Disasters and Litigation: Natural disasters and our litigious culture also play a role in insurance inflation. With the frequency and severity of natural disasters on the rise, insurers face increased payouts for claims. This is especially true in the Rocky Mountian region with consideration of fires, hail, andtornadoes. 

Responding to Insurance Inflation

While higher insurance rates may be a reality, there are steps consumers can take to mitigate the impact.

Explore Discounts: Inquire about discounts for which you may qualify, such as bundling policies or maintaining a good driving record.

Consider Claim Frequency: Before filing a claim, assess whether it’s worth it. High claim frequency can lead to further rate increases.

Adjust Coverage and Deductibles: Review your coverage limits and consider increasing your deductible to lower premiums.

Shop Around: Don’t hesitate to shop around for insurance quotes. At Schomp Insurance we are happy to shop rates amognst our many affiliated national carriers. 

Maintain Safe Driving Habits: Participate in safe driving programs offered by insurers and prioritize safe vehicle choices to lower insurance costs. 

Be Informed: Stay informed about changes in your coverage and inquire about mileage adjustments if your driving habits have changed.

While navigating insurance inflation can be challenging, Schomp Insurance is commited to helping our current and future client be proactive and informed so you can make the informed decisions on how to manage their insurance costs effectively.

You are not alone and we are here to help you navigate the complexities of insurance, including the impact of inflation. Whether you’re in Colorado or Utah, we’re here to assist with all your personal insurance needs.