Insurance rates are on the rise. Here is why.
Updated: Dec 7, 2022
We at KPI actively try and work with our client's needs and have found that telematics is a substantial discount that helps to alleviate the sting of the rate increases on auto. If you are interested in receiving a quote, don't hesitate to contact one of our exemplary agents. If you are already a client and want to discuss telematics on your auto policy, don't hesitate to contact your agent. In the past couple of months, I have heard more than in many previous years about the higher-than-usual price increase on clients' insurance policies. On average, insurance policies have increased by around 15% across all companies. However, many factors go into the increased rate, and we will discuss them below. As you know, the economy of the United States is not in the best shape. Over the past two years, the inflation rate has been over 7%, with a current rate as of this post of 8.2%. This, in turn, causes the prices of everyday necessities such as food and gas to increase. For example, according to the US Bureau of Labor Statistics, the average trip to the grocery store costs Americans 9.16% more than in previous years. The insurance industry is not immune to this as, well. For example, in 2021, most insurance companies lost 10-20 cents on the dollar due to increased repair and replacements being more costly. For example, the prices of asphalt shingles were up 16.3% over 2020, and the cost of material goods was 18.6%. Not to mention the labor shortage. According to labor statistics, in August of 2021, there were 358,000 job openings in the construction industry. On the Auto side, the prices of used cars are up almost 27%, with new car prices around 10%. The average auto claim in 2021 cost 20% more than the previous year, and a sad fact is the severity of accidents was up as well, with an increase of almost 19% in fatal accidents.