As record-setting inflation settles in, many policyholders recognize that their insurance rates will also increase. It can be frustrating to experience across-the-board rate increases, especially if you haven’t recently made an insurance claim and your coverage isn’t increasing. 

Insurance and Inflation 
Insurers face many financial challenges tied to the increased cost of goods and services. The following may contribute to higher insurance premiums: 

• Parts shortage among auto manufacturers: As car manufacturers struggle with supply chain disruptions and COVID-19-related worker shortages, they can’t produce new vehicles to keep up with demand. The chip shortage is just one issue driving up the cost of new vehicles. It costs insurance companies more money to replace a new vehicle if it’s a total loss after a covered event. 
• Increased auto repair costs: Many people who would typically replace their older vehicle when it needs significant repairs are choosing to fix their cars instead. Increased demand for car parts coupled with widespread shortages and increased labor costs means insurance companies must pay more to have a car repaired after a covered accident. 
• Labor costs and materials increased the cost of rebuilding or building a home: Due to reduced availability of supplies, repairing and building homes is more expensive than ever. The construction industry has a shortage of skilled workers, which drives up the cost of labor. Insurance companies must pay more to repair or replace a covered home. 

Contact an Independent Insurance Agent To Reduce Costs 
Your independent insurance agent can review your current coverage and help you decide whether to shop around for a better rate. An independent agent has access to multiple reputable insurance companies. They can help you understand if paying less for your insurance is possible without sacrificing coverage. 

Contact the agents at Kevin Brewer & Associates in Charlotte, North Carolina, today to learn more about reducing your insurance costs and get a quote for auto insurance. 

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.