According to the U.S. Bureau of Labor Statistics, inflation recently hit 9.1%, the highest in 40 years*. Consumers and businesses feel the impact as prices soar for just about everything.
Inflation Impacts Insurance Rates
As inflation increases the cost of labor and materials like lumber, roofing, and auto parts, insurance claims costs also rise. Insurance companies raise rates to cover these higher costs, resulting in higher homeowners and auto premiums.
Homeowners insurance premiums are based upon the home's replacement cost, so as it increases, homeowners premiums also increase. It's important to increase the replacement cost value of your home to keep pace with inflation. Failing to do so can result in insufficient coverage levels in the event of a total loss.
Tips to Minimize Financial Impact
As we face these inflationary pressures, strategies that may help you save money on insurance premiums and associated costs include: