HomeHome InsuranceAuto and homeowners' insurance rates rising

Auto and homeowners’ insurance rates rising

Prices of groceries, clothes and furniture are going up and consumers can add two more things to the list that will be more expensive in 2022: auto and homeowners’ insurance rates.

Auto and homeowners' insurance rates rising (1)

Michael Hartman, a licensed property, casualty and life insurance producer with Joyce, Jackman & Bell Insurors in Pittston, said auto insurance rates will rise between 3% and 12% this year due to “pricing pressures in the market.”

According to the American Property Casualty Insurance Association, pandemic-era factors are making auto insurance more expensive across the U.S. and the world.

“Factors that are impacting risks and costs around the world include the impact of the pandemic, supply chain issues, increased demand and costs and extreme weather,” Hartman said.

Another factor contributing to the rising auto insurance rates is that the number of fatal auto accidents is up 18.4%, Hartman said.

“Distracted driving continues to contribute to the increase in car crashes,” he said.

According to Travelers Insurance, the three biggest tech-related driving distractions are taking and making calls, engaging in social media and using GPS maps and navigation. The average car insurance claim costs are up 20% and parts costs are up 6%.

“Car parts theft is definitely on the rise,” Hartman said. “The pandemic has, sadly, led to financial desperation for some.”

Since 2017, homeowners’ insurance premium rates are up an average of 11.4%, which means they are rising faster than inflation.

Across the country, homeowners renewing their policies are discovering that rising material costs, supply chain disruptions and climate change are driving premiums up.

Not only are claims more prevalent due to extreme weather, but Hartman said repairs and replacements are more costly. He said extreme weather is a big factor since there are more tornadoes, hurricanes and wildfires.

“When a natural disaster affects an area, demand for materials and labor will affect prices,” he said.

Hartman estimated area homeowners pay an annual premium of $1,200. He said the average homeowner spends less than 3% of his or her household income on home insurance.

According to Travelers Insurance, asphalt roofing material prices are up 16.3% over last year and lumber and wood prices are up 6.2%.

“Home repairs are costing more due to the increased cost for material goods,” Hartman said. “The supply chain is having difficulty keeping up with the consumer demand due to the pandemic but also due to many businesses struggling to return to pre-pandemic employment levels.”

Source: https://www.standardspeaker.com/news/business/auto-and-homeowners-insurance-rates-rising/article_04fca69b-9a24-5b60-ab14-afc8e33587b8.html

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