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Auto Insurance Trends 2023 – You are here: Home / ABI / Why home and car insurance rates will continue to rise in 2023
Thanks to an unusual convergence of market trends, triggered by the pandemic and followed by other disruptive events, you may see a larger than usual change in the cost of your home and car insurance when it’s time to renew your policy this year. anus.
Auto Insurance Trends 2023
Insurance prices are based on what an insurer thinks it will cost to compensate you in the event of a loss, whether it’s roof damage during a gust of wind or a vehicle totaled during a traffic accident. As you’ve probably noticed, almost everything costs more than it did a few years ago.
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If you’ve shopped at Home Depot or Lowe’s lately, you’ve probably seen that the prices for building materials have gotten expensive. Last year, the cost of building materials rose by 4.7%, with particularly sharp increases in prices for items such as asphalt shingles (16.2%), concrete blocks (18.5%) and drywall (20.4% ) reflected.
To make matters worse, the home building industry is facing a shortage of more than 300,000 skilled workers, driving up construction-related labor costs. Combined with the high cost of building materials and historically low housing inventory, this has made housing claims much more expensive for insurance companies.
Current supply chain issues are causing a shortage of auto parts and equipment, which were 22.3% more expensive by the end of 2022 than two years earlier. The total cost of vehicle maintenance and repair increased by 18.4% in the same period, compounded by a growing shortage of auto repair technicians.
The same problems dried up the supply of new and used cars during the COVID-19 pandemic, and inventories have yet to recover. As a result, the average price of new cars has increased by 20% since 2020, while used car prices have increased by 37%.
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Rising medical costs are another key factor. While the number of car accident injuries and deaths has decreased somewhat from its peak in 2021, the rising cost of health care continues to lead to higher claim costs. Between 2020 and 2022, the total cost of health care in the United States will increase by 6.8%.
Remember that savings come in many forms. The value of the coverage you choose today can save you more in the long run than the lowest possible premium.
Contact us to review your current coverage. We’ll help you discover discount opportunities that could offset higher rates when it’s time to renew. 503-292-1580.
Sources: National Association of Realtors, Federal Reserve Bank of St. However, many car insurance customers do not know that the same companies that offer their car insurance also offer life insurance. New research highlights the untapped potential for multi-line insurers to sell life insurance to existing and potential customers. When it’s available, less than half of auto insurance policyholders (45%) know their auto insurer offers life insurance, and even fewer (31%) remember discussing it with the company or an agent.
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According to Cross-Selling Life: The Consumer Perspective, 43% of those with auto insurance trust their auto insurance company.
Talk to them about your life insurance needs. This adds up to nearly 7 in 10 multi-line customers – those who have auto, home and life insurance with the same company. Based on their personal experience, Multiline customers are most convinced of the skills of car agents when it comes to life insurance: 64% agree that car agents know about life insurance, compared to only 24% of customers who do not know. I remember talking about the product once.
There is one benefit for companies and agents to expand their relationship with their auto insurance customers: loyalty. Among the respondents, multi-line customers are much more likely to be with the same car insurer for more than five years, compared to respondents who have only one car insurance policy with the insurer.
They also have life insurance, but are more “sticky” in nature to begin with. These customers differ from those who only have auto or property and casualty insurance. Demographically, multiline customers tend to be younger, wealthier and more educated. , often with children under 18, suggests a possible need for family-focused coverage such as life insurance. They demonstrate self-reliance, rely on their own knowledge and judgment to make financial decisions, and value the experience and convenience of interacting with financial professionals.
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Overall, the perceived cost of life insurance is the number one barrier preventing consumers from getting the coverage they say they need. In the 2023 Insurance Barometer study, nearly half (46%) of all uninsured consumers say one of the main reasons they haven’t purchased coverage is that they believe life insurance is too expensive. Research suggests that price is an easier hurdle to overcome when selling life insurance for those with auto insurance. According to the findings, multiline customers are more likely to value the reputation, product offering and accessibility of a company’s agents.
“Today, there are more than 56,000 multiline agents working in the United States. While life insurance accounts for only 14% of their business on average, this new research shows that there is a significant opportunity for these agents to expand their business and reach millions of Americans help those who say they need (or need) more insurance.” said Donna. Chaffin, Associate Director of Research, Distribution Research.
However, the study says that most of the time agents and multi-line insurers do not have conversations about life insurance with their customers. Seven out of 10 consumers do not recall their auto agent or insurer ever mentioning life insurance. Opening up the conversation about life insurance could not only drive business growth, but also help more consumers get the coverage they need to protect their loved ones’ future financial security. Thanks to an unusual convergence of market trends, triggered by the pandemic and followed by other disruptive events, you may see a larger than usual shift in the cost of your home and car insurance when it’s time to renew your policies. .
Insurance prices are based on what an insurer thinks it will cost to compensate you in the event of a loss, whether it’s roof damage during a gust of wind or a vehicle totaled during a traffic accident. As you’ve probably noticed, almost everything costs more than it did a few years ago.
Car Insurance Rates Are Skyrocketing
If you’ve shopped at Home Depot or Lowe’s lately, you’ve probably seen that the prices for building materials have gotten pretty expensive. Last year, the cost of building materials rose by 4.7%, with particularly sharp increases in prices for items such as asphalt shingles (16.2%), concrete blocks (18.5%) and drywall (20.4% ) reflected.
To make matters worse, the home building industry is facing a shortage of more than 300,000 skilled workers, driving up construction-related labor costs. Combined with the high cost of building materials and historically low housing inventory, this has made housing claims much more expensive for insurance companies.
Current supply chain issues are causing a shortage of auto parts and equipment, which were 22.3% more expensive by the end of 2022 than two years earlier. The total cost of vehicle maintenance and repair increased by 18.4% in the same period, compounded by a growing shortage of auto repair technicians.
The same problems dried up the supply of new and used cars during the COVID-19 pandemic, and inventories have yet to recover. As a result, the average price of new cars has increased by 20% since 2020, while used car prices have increased by 37%.
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Rising medical costs are another key factor. While the number of car accident injuries and deaths has decreased somewhat from its peak in 2021, the rising cost of healthcare continues to drive higher claim costs. Between 2020 and 2022, the total cost of health care in the United States will increase by 6.8%
Remember that savings come in many forms. The value of the coverage you choose today can save you more in the long run than the lowest possible premium.
Contact us to review your current coverage. We’ll help you discover discount opportunities that could offset higher rates when it’s time to renew. We’re here to help you figure out why home and auto insurance rates continue to rise.
Sources: National Association of Realtors, Federal Reserve Bank of St. Louis, Institute of Home Builders, CoreLogic, Consumer Price Index, TechForce Foundation, Safeco Insurance
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