How Inflation Is Affecting Your Insurance Rates and What You Can Do About It

Florida residents already pay some of the highest auto and home insurance rates in the country—and now inflation is making it worse. Some of the same factors driving inflation in general are driving premium increases across nearly all lines of insurance. These factors include supply chain issues, labor shortages, and the rising cost of goods and services. Insurance companies are businesses, and the cost of doing business has gone up considerably. Read on for how inflation is affecting your insurance, and for a few tips to help lower your premiums. 

What’s driving up car insurance prices?

Cars have become so high tech that not only do they cost more to repair, they require new training for auto mechanics.  Add that to an already existing shortage of qualified mechanics and getting a vehicle repaired becomes even more challenging. In addition, repair shops can’t get the parts they need to fix damaged vehicles so they’re forced to total them, resulting in larger claim amounts being paid out. These higher expenses are taken into account when insurance companies calculate their rates. (For more on how supply chain problems can affect your car insurance, click here.) 

Homeowners insurance and inflation

Homeowners across the nation are facing rate increases that Florida homeowners have been enduring on a larger scale for the past couple of years. Inflation-related drivers of these price increases include the cost of building materials and a labor shortage of construction workers. Simply put, houses cost more to repair or rebuild, so once again, insurance companies are calculating these costs when setting their rates. (In Florida, the homeowners insurance market faces even more challenges. See: “AOB Abuse and Fraud Help to Drive the High Cost of Insurance.”)

How can you reduce insurance premiums?

There’s only so much you can do in the tight insurance market we have here in Florida, but every little bit helps. Here are a few suggestions for saving money on your insurance premiums:

·       Shop for your insurance with an independent insurance agency. An independent agency like Lakewood Financial has more options than captive agents when quoting a policy. We represent more than 80 high-quality insurance companies.

·       Improve your credit score. A higher credit score almost always results in lower insurance premiums.

·       Keep your driving record clean. Still one of the best ways to help you get the lowest rate possible.

·       Ask about discounts. You may be able to get small discounts on your auto or home insurance for things like safe driving, safety features or alarm systems, having no gaps in your insurance coverage, signing up for auto pay or paying in full, living in a gated community, and so on.

·       Reduce coverage. Sometimes if money is tight, it makes sense to reduce coverage in order to save on premiums. You’ll need to think carefully about your situation, and what you can handle financially if you were to have a loss. A Lakewood Financial agent will be happy to help you consider your options.

·       Increase your deductibles. You’ll have to decide if the amount you save in premium is worth the additional amount you’ll owe out of pocket if you have a claim.

Talk to an independent agent

We know you have many choices when it comes to insurance, and we’d like to thank you for considering Lakewood Financial for your insurance needs. If you have any questions about what coverage you need, or you need a quote for a car, home, or business policy, please call us at 941-747-4600, or click here to contact us online. We’ve been helping our neighbors in Lakewood Ranch, Sarasota, Bradenton, and surrounding areas since 2003.