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Tips for Managing Insurance Costs in Uncertain Times

You may notice a higher than normal increase on your renewals this year. We’ve seen shocking home and auto premium increases across the board for our clients in Oregon, Idaho, and Washington. Unfortunately, this is a nation-wide issue. The good news is that it’s not based on your personal features, and once the economy settles, experts expect lower premiums will return. 

We understand that these premium increases are frustrating, especially when you don’t know what’s going on behind the scenes. In this blog, we shed light on the insurance market in 2024 and what you can do to secure more affordable premiums.

Overview of recent insurance premium trends

In 2023 and continuing into 2024, insurance premium trends have had unprecedented increases across nearly all sectors from auto to home to even commercial and health policies. In Oregon, car insurance prices have skyrocketed as much as 25% since the beginning of 2023. Similarly, home policy premiums have risen more than 20% since 2022 and the average home costs $600 more to insure in 2024 than it did in 2019.

Experts describe our current situation as a “hard insurance market.” In simple terms, we’re in a perfect storm of economic and workforce factors that result in higher premiums.

Definition of Hard Insurance Market

Why insurance costs are rising dramatically

A quick trip to Safeway reminds us of how much prices have risen in the past few years. From eggs to homes, the story is all the same. CNBC reports that car repair costs alone have surged by almost 20% over the past year due to supply chain disruptions and material/labor shortages.

Construction workers are in high demand as the industry is stretched thin by a decreased emphasis and appreciation of trade skills. As a result, we’ve seen higher construction costs and longer wait times for new builds and repairs.

Most unfortunate, even in small communities like Wallowa County, we have seen an increase in theft and other crimes. This results in insurance companies needing to cover more theft claims and increasing premiums to compensate for their loss.

Essentially, in a hard insurance market, insurance companies experience increased costs, higher claim frequencies, and reduced profitability. Consequently, they raise premiums, tighten requirements, and reduce coverage options to compensate for these risks.

Why insurance companies increase premiums

Insurance works as a pool of money. Your premium payments contribute to this pool so that when you or someone else needs to file a claim, the money already exists like one collective rainy day savings account. 

When we see an increase in repair costs or increase in claims, insurance companies must quickly replenish the pool by raising premiums. They may also need to decrease the risk of claims by creating stricter underwriting requirements. For example, they may have previously accepted potential customers who have up to five claims in the past five years, but now, they may only accept potential customers who have up to three claims.

Jar with coins falling out to illustrate how the insurance pool works

Keeping your premium affordable amidst economic stress

While we have hope that the hard market will sway back to normal soon, we know that rising premiums can put undue pressure on you and your family. Here are a few proactive steps you can take to potentially lower your premium.

  1. Review and compare your policy. Take the time to carefully review your current policy when you receive your renewal in the mail or in your email. Your renewal is a great opportunity to shop for alternatives or discuss coverage options. As an independent agency, we can help you explore different options tailored to your needs and are happy to shop your policies at each renewal.

  2. Bundle your policies. Many insurance companies offer discounts for bundling. While bundling is traditionally offered for home and auto, bundling discounts are also available to renters. Give us a call to discuss bundling your policies. We will weigh the pros and cons and can provide scenarios so you know what is best for you at this time.

  3. Optimize your coverage. Work with your agent to ensure you’re not over or underinsured. Adjust coverage limits and deductibles to strike the right balance. A good rule of thumb is to consider the highest deductible you could reasonably afford in the event of a significant claim.

  4. Proactively mitigate risks. Pruning trees, monitoring your roof’s quality, and regular car maintenance are all examples of risk mitigation. By protecting your assets, you decrease the likelihood of a claim. Some insurance companies offer discounts for risk mitigation measures like installing security systems or taking a safe driving course.

  5. Stay informed. Keep an eye on the changing insurance market. Get in touch with us any time you have questions or would like to explore the options available to you.

Navigating a hard insurance market can be challenging. By understanding the factors driving the surge in insurance rates, being proactive in reviewing your policies, and leveraging the expertise of your insurance agent, you can protect your assets and find peace of mind amidst uncertainty.  If you have any questions or need assistance with your insurance needs, don't hesitate to reach out. We're here for you every step of the way.


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