If you’ve been looking into insurance rates lately, you may have noticed that they’ve been going up. Some carriers have reported increases ranging from 20% to 30%. This applies to both home insurance in Frisco and to car insurance – along with many other types of coverage.
At Frisco Insurance, we understand that you need to get the best policy for your family, you need to find something that fits your budget and you need to make sure that you have the type of coverage you need. One step to take toward achieving this goal is simply to consider why the prices are going up and what that will mean for your policy.
Costs from the insurance carriers
First of all, as noted above, insurance carriers are raising their rates. When you come to an insurance agency, we can help you shop around and look at different rates that might work for you. But we do not actually control the base rates coming from carriers, so there’s going to be an inherent level of increase simply because those costs work their way through the entire system.
Other costs are rising as well
It’s probably not just insurance that has been increasing for you lately. For instance, some in the construction industry have reported more than a 14% increase in the cost of supplies and building materials. Lumber itself is more expensive than it has been in a long time. Meanwhile, some industries have fewer laborers and so the cost of the workers they do have are increasing.
These increased building costs can certainly impact home insurance. Your home insurance policy is designed so that, if your house is damaged or even a total loss, it can be replaced. But it may cost vastly more to rebuild your house now than it cost to buy it when it was first on the market – or to build it initially. A simple increase to the cost of lumber and other supplies means that homes are coming in thousands of dollars higher than they would have before. This pushes up the cost for the insurance company and the cost for the consumer.
But you can also see the impact of these rising costs when you look at car insurance. The price of a used car has gone up by approximately 55% in just the last two years, and new cars have even gone up 14%. Some of this is because of supply chain issues that make it harder to find vehicles, which means that the demand for them is greater than the supply and the costs are rising. If you buy auto coverage, the cost is probably going to rise because it needs to be able to cover the higher cost of the vehicle itself.
Car accidents are not getting better
Another reason for the increase in auto coverage costs is simply that accidents are becoming both more common and more severe. There were fewer accidents over the last few years, with people working from home and for various other factors, but the accidents that did occur tended to be far more severe. For instance, the total number of fatal accidents rose in both 2020 and 2021. Even when traffic levels were lower, more people were passing away in the accidents that were happening.
Now in 2022, the traffic levels are increasing again and that’s leading to a corresponding increase in accidents. It’s too soon to know if the fatality rate is going to drop or if it’s going to stay as high as it got during the last two years, but it’s clear that there are going to be a lot of crashes that many of them are going to be serious. You may not have been involved in one, but that is still going to impact your rates.
Changes to the weather
Finally, weather conditions also can impact insurance rates. As far as rates for home insurance in Frisco, severe weather is worse than it’s ever been. Catastrophic claims come in about every 18 days, on average. You have homeowners dealing with hail, wind storms, hurricanes, wildfires and floods. As long as the weather continues to get worse, that’s going to cause damage to both cars and buildings, and that will make insurance for both go up.
Furthermore, increased building practices in the housing market mean that there are a larger total number of claims every year. There are simply more houses being built and then damaged by the weather. Everyone’s insurance policy rates are going to be impacted by the total number of claims filed each year, so this increase is part of the cost that you’re paying.
Finding your policy
It may feel like everything is getting more expensive due to labor costs, materials, weather, accident trends and much more. But we can still help you here at Frisco Insurance so that you can find an insurance policy that gives you the proper coverage in a way that fits your budget. Please come work with our experienced team as soon as you can.