Homeowners and Auto Insurance Trends Expected for 2023
There are several, biggest factors affecting home and auto insurance through 2023. The home insurance market is currently challenged by three significant market conditions discussed below. If you have any questions, contact our office at 413.475.7283 or fill out our quote form online today!
Inflation wreaks havoc on all types of consumer goods and services, and insurance is not immune to its damage. The cost of insurance increases during periods of inflation in response to the costs of things that affect claims and premiums. Customization of insurance coverage is key during times of high inflation.
Increase in natural disasters
Tracking natural disaster data reveals a dramatic increase in catastrophic events, especially from 1980 to the present. Similar to the inflationary model, the cost of insurance premiums will follow, as the cost of repairs increases with the frequency of natural disasters. In addition to homeowners insurance premiums rising across the country, many property owners are not properly insured against catastrophic events such as floods. With climate change causing an increase in catastrophic weather events across the country, the environmental impact on the insurance industry will only become more severe. It is important for consumers to understand what their policies do and do not cover when it comes to natural disasters.
Relocations and tax increases
An increase in telecommuting opportunities encouraged many Americans to relocate during the height of the pandemic and continued into 2022. As more people obtained mortgages in states where they had not previously lived, many homeowners obtained their home insurance from companies they had not had. previously done business with. While nearly every state in the country saw home insurance premiums increase, lower taxes, home prices and the overall lower cost of living made the Southeast very attractive to budget-conscious consumers.
The average American driver will pay nearly $1,900 for auto insurance in 2023, as insurance rates continue to rise across the country. By the end of 2023, Americans will pay 16% more for auto insurance than they did at the beginning of this year. Auto insurance prices increased 9% in 2022 and are likely to increase another 7% in 2023, with the average American spending $1,895 on auto insurance by year’s end. Many of the factors that contributed to rate increases in 2022 will continue to be at play for American drivers in 2023. Annual data reflects the state of the insurance industry, and the new report predicts that higher driving rates, more serious accidents, the impact of inflation on vehicle repair and medical costs, and the potentially increased the frequency of wildfires and hurricanes will continue to be the key factors contributing to interest rate increases next year.
Contact Encharter Insurance at (413) 475-7283 or visit www.encharter.com to review your homeowners and auto insurance policies and look for ways to save money on your current policy.
Source: https://www.propertycasualty360.com/2022/11/29/the-biggest-factors-impacting-home-insurance-heading-into-2023/ and https://www.businesswire.com/news/home /20221207005191/en/New-Insurify-Report-Americans-Will-Pay-16-More-for-Car-Insurance-by-the-end-of-2023