If Your P&C Insurance Rates Went Up, You're Not Alone

If you’ve noticed a significant rise in your home and auto insurance premiums, you’re not alone. The average cost of car insurance has jumped more than 20% in the last year.¹ The average homeowner's insurance premium rose 7.6% in 2021 from 2020.² The countrywide average auto insurance expenditure increased 1.4%.³

Let’s look at why rates are increasing and several strategies to help lower your insurance premiums without sacrificing coverage.

Why Are Insurance Rates Rising?

Insurance rates are influenced by various factors, most of which are beyond your control. Here are just some of the reasons why your premiums might be going up:

Inflation
Increased frequency and severity of natural disasters
Supply chain disruptions
Global unrest
Increase in claims

What Can You Do About Rising Insurance Rates?

While it may seem like rising insurance rates are out of your hands, there are steps you can take to ensure that you're still getting the best value for your money.

Shop Around for Better Rates

One of the best ways to combat rising premiums is to shop around. Don’t assume that your current provider is offering the most competitive rates. Insurance companies calculate premiums differently and have varying claims experience, so the cost of the same coverage can vary significantly. Get quotes from multiple companies and compare coverage options. In some cases, you may find a better deal by switching insurers.

Here are some tips when shopping around for better rates:

Get at least three quotes from different insurers.
Check for any available discounts, such as bundling home⁴ and auto insurance⁵.
Review the coverage details to ensure you're comparing equivalent policies.
Use online comparison tools or work with an insurance broker for a better rate.

Bundle Your Insurance Policies

Many insurance companies offer discounts when you bundle multiple policies, such as auto and home insurance, with the same provider. Bundling can save you significant premiums and make managing your policies easier. Depending on the insurer, potential discounts can range from 5% to 25%.⁶

Increase Your Deductible

Raising your deductible can lower your premium. While this means you’ll have to pay more if you file a claim, it can significantly reduce your annual costs. For example, increasing your deductible from $500 to $1,000 could save you up to 25% on your premium.⁷

Ask About Discounts

Insurance companies offer discounts for various reasons, such as having a clean driving record, installing safety devices in your home, or being a long-term customer. It never hurts to ask your provider about any discounts you may qualify for.

Maintain a Good Credit Score

Your credit score can influence your home insurance premium. Insurers often use credit-based insurance scores to determine the likelihood of a claim. Maintaining a good credit score can help you secure lower premiums.⁸

Avoid Small Claims

Did you know that filing multiple small claims can lead to an increase in your premium? Insurance companies may raise your premium or even drop coverage if you file too many claims. If you can, consider paying for minor repairs out of pocket (see increase deductible). This helps keep your claims history clean, which can result in lower premiums over time.

Improve Home Security

Insurance companies often offer discounts for homes equipped with security systems. By making your home safer, you reduce the likelihood of a claim, which insurers reward with lower premiums. Consider installing security alarms, smoke detectors, water shut off values, deadbolts, and cameras. Some insurers offer discounts of up to 15–20% for comprehensive home security systems.⁹

Review Your Coverage

Regularly review your insurance policies to ensure that you're not over-insured. For example, if you drive to the office less than you used to, you may no longer need as much coverage for the reduction in miles. Additionally, here are some examples of updates that might impact your home insurance premiums:

Ensure your coverage reflects the current value of your home and possessions.
Eliminate unnecessary add-ons that no longer apply to your situation.
Update your insurer about any home improvements that could qualify you for discounts.

Adjusting your coverage levels can reduce your premiums without sacrificing protection.

While increasing premiums might seem like a lost cause and out of your control, you can do a few things to ensure you’re still getting the best rate. You can effectively reduce your insurance premium by shopping around, increasing your deductible, improving your home’s security, and taking advantage of available discounts. If there’s anything we can do to support you, please reach out.