Many have been feeling the effects of inflation in their daily lives. A recent trip to the grocery store or filling up at the fuel pump may reveal high inflation levels. As with most other things, inflation is causing insurance rates to rise as well. We’re going to break down how inflation is changing insurance in different ways.
Types of Insurance Affected by Inflation
So, your insurance has been impacted by inflation rates and your monthly bill is more. Why does insurance go up? Simply put, the cost of repairs has skyrocketed. If a tree fell on your house and car during a storm, the cost to replace the roof and fix your car is more than it used to be. Thankfully, Farm Bureau’s One Deductible can be helpful when a situation like this arises. Ask your Farm Bureau agent today for more information.
4 Ways Inflation Impacts Insurance Rates
Your insurance rate increase goes beyond the cost of goods and services increasing. Here are four ways inflation has caused insurance premiums to increase.
Increased Replacement Costs
As mentioned, the impact of inflation and labor shortages has caused the repair costs for things such as homes and cars to increase. Insurance companies may adjust coverage limits and raise premiums to account for these additional costs.
Inadequate Coverage Amount
When inflation impacts the economy, it affects many businesses and individuals. What may have covered you in the past may not be enough to cover you now. Check with your Farm Bureau agent to make sure you’re protected if the unexpected happens.
Insurance companies consider inflation when they are calculating rates. If inflation is high, many within the insurance industry may be forced to raise their costs to be able to cover insurance claims.
Reinsurance is used as a resource for insurance companies to help determine insurance costs. Reinsurance also helps manage risk, which can help save consumers money in the end. Rates for reinsurance have increased in response to inflation, influencing the cost of premiums for policyholders.
Strategies to Save Money on Insurance Premiums
In this economy, we know that consumers may be looking for ways to save money. At Farm Bureau, we offer insurance discounts to counter rising home and auto insurance rates: discounts for good driving through our Driveology® program, rewards for students with good grades, rate reductions for safe young drivers, potential savings on your homeowners insurance and much more.
We’re Here to Help
Want to learn more about how you may be able to combat inflation in your insurance? Contact a local Farm Bureau agent today to hear more.