Understanding Recent Insurance Rate Increases

These last couple of years have been CRAZY. From the famous spike in egg prices to the cost of used cars, or even the cost of a HAPPY meal it seems that we are all taking it on the chin. Over the last several months, a new player has gotten into the mix, and we are seeing insurance rates spike for both home and auto insurance. 

WHY?

In short, the cost to insurance companies has spiked. Like what? Over the last couple of years, insurance companies have been hammered by the high prices of cars, car parts, and labor costs. On the homeowner’s insurance side, it’s no different. The cost of construction materials and labor has spiked. The net effect is that insurance companies have paid more and are passing the costs through higher rates to the consumers. While that might seem unfair, most insurance companies have lost billions of dollars, and simply can’t afford the losses and stay financially strong enough to keep their promise to their customers to pay claims. 

This is affecting EVERYONE!

This is not just happening to you, it is happening to EVERYONE nationwide. Here are a couple of things that being said in the news:

Fox News: Auto insurance premiums are skyrocketing. What’s to blame?

Arizona’s Family: Arizona homeowner’s insurance rates skyrocketing, some hit with 50%-100% increase​

The Problem

Traditionally, as an independent insurance agency when rates went crazy with one company, we would move to the next company, and everyone was happy. Unfortunately, that is no longer a viable strategy as carriers have put up roadblocks like higher down payments, stringent property inspections, and crazy underwriting rules (seriously we have one carrier that won’t accept you if you have a shingle roof older than 10 years old). 

So what’s the Solution?

• Sometimes we still can shop and find better rates, but over the last year, we have learned that is not a silver bullet. So we reserve that for the egregious increases. On average in the state of Arizona, we are seeing somewhere between a 25-40% increase in the rate.
• One thing you can look at the deductibles. A higher deductible means a lower rate. How much will you save? It will vary, but sometimes it can make sense.
• Bundling – Many of our clients don’t realize everything we offer. We offer Auto, Home, Motorcycle, Umbrella, Rental Properties, boats, and business insurance. if it makes sense to bundle we can help. 
• Discuss coverage. We buy insurance to make sure we are covered. But do you need full coverage on the 2012 vehicle? Maybe, it can depend on your financial situation. You will rarely find an agent that will recommend lower coverage, for a variety of reasons. But, one thing I know is that when customers have shopped and found cheaper coverage it’s usually a function of less coverage, higher deductibles, and they have NO IDEA. There can be ways to save, and we at Gila are dedicated to helping you find these, but the key is to understand what you are removing and make sure you can live with the consequences. 

We are here to help. We at Gila Insurance are dedicated to being direct so that we can help our clients make the best decisions for them. If you are frustrated, let us know. If we can’t find something better we will tell you. If you find a quote elsewhere that is cheaper we want to review it so that you know what you’re getting. in short, let us help you navigate through this insurance hurricane, and help you find solutions for your budget.