At Esch Insurance Agency, we want to share insights into the state of the insurance industry and help you understand the factors driving premium adjustments you may encounter during your renewals this year. Unfortunately, this is an industry-wide issue that many consumers are experiencing.

The truth is that no matter where you live, several factors have disrupted the market, leading to rising rates and difficulties in finding coverage. These include:

Factors Contributing to Rising Insurance Premiums

1. Higher Rebuilding Costs
   The cost to rebuild homes has risen dramatically due to the increasing prices of materials and labor. Persistent supply chain issues for materials continue to exacerbate the situation. Unfortunately, insurance carriers are unable to absorb these higher costs without adjusting premiums.

2. Higher Vehicle Repair Costs
   Vehicle repair costs have increased by 20%, driven by the rising prices of auto parts and labor. Modern vehicles also incorporate advanced technology features, which are more complex and expensive to repair.

3. Higher Medical Costs
   The cost of medical care continues to soar, particularly in cases involving bodily injuries from auto accidents, which are impacting claim payouts significantly.

4. Increased Litigation Costs
   Litigation expenses have been rising at an unprecedented rate—up 30% in 2022 alone. These costs are passed down to insurers and, ultimately, consumers.

5. More Frequent and Severe Auto Accidents
   Post-pandemic, auto accidents and fatalities have increased, further straining the insurance market.

6. Higher Reinsurance Costs
   Reinsurance, which carriers purchase to mitigate catastrophic losses, has become more expensive and limited in capacity. These rising rates are unsustainable, putting additional pressure on carriers and consumers alike.

Tips to Navigate the Current Insurance Market

While these challenges may seem daunting, there are proactive steps you can take to manage your insurance costs and maintain your coverage:

1. Consider Higher Deductibles
   Increasing your deductible might help reduce your premium. While this isn’t ideal for everyone, it could make sense depending on your financial situation. We’re happy to discuss whether this option is right for you.

2. Avoid Policy Cancellations or Lapses
   Letting your policy lapse can have significant consequences. Many carriers are no longer reinstating coverage as easily as before, and a lapse could result in needing to pay your premium in full or losing your policy entirely. To stay protected, pay your premiums on time or in advance.

3. Maintain Tenure with Your Carrier
   Switching insurance providers frequently can work against you. Many carriers prioritize customers with a stable history and may be hesitant to accept new clients with less than two years of tenure or a history of frequent claims.

4. Minimize Small Claims
   Filing numerous small claims can increase your rates over time. When possible, consider saving claims for significant or catastrophic events.

We’re Here to Help

Understanding these market dynamics can provide valuable context as you navigate your insurance needs. If you have any questions or want to explore your options, don’t hesitate to reach out. At Esch Insurance Agency, we’re committed to helping you make informed decisions and ensuring you stay protected.

Let’s work together to weather this challenging market. Contact us today to discuss your coverage or explore strategies to manage your premiums effectively.