The Rising Costs of Personal Insurance

According to CNBC News, inflation has risen by 8.3% over the past 12 months. However, other costs have skyrocketed beyond even the inflation rate. Policygenius reports that home insurance is currently up 12.1%.

Other costs could also impact your rising insurance premium. For example, building materials have become more expensive. This issue could cause problems if your insurance has to pay for repairs.

Many people wonder who’s responsible for these insurance premium increases.

Is it your insurance agent gouging prices? Or is there another issue affecting these rates?

If that’s what you’re wondering, this guide is for you! We’ll explore the sources of this increase below and answer your questions. Let’s get started, shall we?

How Much Have Insurance Premiums Increased?

As mentioned before, Policygenius reports that home insurance is currently up 12.1%. However, what does that figure mean in terms of dollars?

As of November 2022, the average cost of homeowners insurance is roughly $1,784 annually. This breaks down to roughly $149 monthly.

However, this is only the national average. Various states may have higher averages than others.Ensure you have the right amount of personal insurance coverage for your family

For context, consider that the average cost of homeowner’s insurance in 2019 was $1,272. This figure demonstrates an increase of roughly $500 between 2019 and 2022.

Homeowner’s insurance premiums aren’t the only figures rising. The same has occurred with car insurance.

The question on many people’s minds is why? Why have insurance premiums seen such a significant increase? We’ll explore these factors more in the next section.

What’s Causing Rising Insurance Premium Costs?

Several factors caused insurance prices to increase. First, the COVID-19 pandemic and subsequent lockdowns took a significant toll on the insurance industry.

Insurance underwriting and investments declined as employees began to work from home. Similarly, many smaller providers had to close their insurance businesses as revenues shrank.

These factors meant that there wasn’t enough money for expansive insurance coverage. As a result, many businesses had to drop insurance plans that seemed unnecessary.

Likewise, many companies had to cut employees loose because they couldn’t afford the staff. They also had to decrease benefits packages to afford employees’ salaries.

Since the COVID lockdowns ended, many companies brought employees back to their offices and reinstated benefit packages. Many insurance carriers must increase their premium prices to accommodate these additions.

Other factors also caused increases in insurance premiums. Some of these apply specifically to car insurance.

For example, as cars return to the road, more people file for car insurance claims. NBC News reports that deadly car crashes hit a high in early 2022, with some experts blaming COVID-fueled risky driving.

Finally, Texas homeowners must consider the role of the Texas Department of Insurance. This department remains responsible for regulating insurance in Texas.

This department ensures that premiums cannot rise beyond a certain level. It also licenses insurance agents and handles insurance-related complaints.

What Factors Determine Your Insurance Premium?

The average insurance premium rate is not necessarily what individuals pay. Insurance premiums can vary between individuals.

Insurance actuaries determine your premiums in compliance with policies set by the Dept. of Insurance. In doing so, they’ll consider several factors.

First, they’ll consider the type of insurance coverage you require. More comprehensive insurance policies come with pricier premiums.

Another factor to consider is the amount of insurance coverage you require. Premiums are less expensive if they provide less coverage.

For example, insurance providers will charge lower rates if the only home insurance you require is fire insurance. In contrast, your premium will cost more if you purchase extensive home insurance for your household.

Providers also examine your insurance history. How many times have you filed insurance claims in the past?

This factor often comes into play with car insurance. Your car insurance premiums generally rise when you file more insurance claims. Usually, this happens because you’ve gotten into more car accidents in the past.

Finally, there are personal factors that can cause your premiums to vary. Some of these personal considerations include:

  • age
  • place of residence
  • marital status
  • lifestyle
  • medical history
  • credit history
  • driving record
  • employment status

In short, insurance providers want to ensure you are unlikely to file an insurance claim – what’s your risk. Likewise, they’ll judge how well you can pay debts and bills when deciding your premium. If both seem likely, they’ll lower your premium rates.

How Can You Reduce Insurance Premium Costs?

Despite rising insurance premiums, there are several ways to reduce these premium costs. There are specific steps to make your property seem safer to your provider.

One common method is installing a home security system. Alarms, video doorbells, and security cameras can go a long way to preventing threats from striking your home. These systems can dissuade a burglar from targeting your house.

There are similar steps you can take to lower your car insurance premiums. One example is installing a dashcam for your vehicle. This camera provides increased certainty about who’s at fault if you get pulled over or have an accident.

However, there are other things you can do to reduce your premiums. One common tactic is raising your deductible. The higher your deductible, the less you’ll pay for monthly premiums, but keep in mind, higher deductible means you pay more out of pocket when/if you file a claim.

You can also bundle your auto and homeowners policies with a single insurer. Bundling your policies often results in discounts on your premiums.

Find the Best Personal Insurance in Texas

Several factors account for rising insurance premiums. It’s challenging to find affordable rates for personal insurance policies.

However, this difficulty doesn’t make it impossible to find affordable premiums. Often, it helps to work with an independent insurance agency.

Kicker Insures Me is an example of such a company. We help Texas residents find affordable policies by providing access to multiple companies and many products. We also make it easy to work with us, we have online quotes, texting or phone calls along with email. We try to cover all the basis.

Finally, we provide objective advice on finding insurance. If that appeals to you, don’t hesitate! Find a quote today for your insurance premium or call/text us at (281) 487-9686 today.

Request Your Proposal Here

Are you ready to save time, aggravation, and money? The team at Kicker Insures Me is here and ready to make the process as painless as possible. We look forward to meeting you!