How the Economy Affects Insurance Rates
Rising costs are a concern for both insurance companies and consumers. Inflation, higher interest rates, increased costs, and weather and climate events all affect the cost of insurance coverage.
Here’s a look at some of the factors that may be influencing what you pay.
- Supply chain shortages have made it difficult to repair vehicles efficiently and at a low cost. (1)
- Nearly 80% of collision repair shops are scheduling appointments 2 weeks or more into the future. (2)
- Driven by rising prices, the amount insurers paid to cover claims increased by $30 billion in 2021. (3)
Costs have increased:
- 19.5% for motor vehicle repairs (4)
- 9.9% for motor vehicle parts and equipment (4)
Prices for materials continue to rise:
- 12.5% Floor coverings (4)
- 18% Drywall (5)
- 14.8% Concrete products (4)
There are more frequent and severe weather and climate events, including wildfires and hurricanes. (6) The annual cost of natural catastrophes around the world is estimated at $123 billion. (7) There has also been a surge in nonweather-related water damage, such as plumbing leaks.
- There’s approximately $8.24 billion in these types of property losses. (8)
- 1 in 60 insured homes has a claim caused by water damage or freezing. (9)
As we all navigate a changing economy, there are plenty of ways to save. Talk with your agent today to review your products and discounts.
 “Repair Costs & Labor Issues Affecting Insurers in 2023,” agencyheight.com/car-repair-costs (Jan. 9, 2023).
 “Crash Course 2022 Mid-Year Update: Gearing Up for What’s Ahead,” cccis.com/news-and-insights/insights/crash-course-2022-mid-year-updategearing-up-for-whats-ahead/ (May 31, 2022).
 “Countering inflation: How US P&C insurers can build resilience,” mckinsey.com/industries/financial-services/our-insights/countering-inflation-how-us-pand-
c-insurers-can-build-resilience (Aug. 25, 2022).
 Bureau of Labor Statistics/Nationwide Economics (December 2022).
 “CoreLogic Quarterly Construction Insights Q4 2022,” corelogic.com/wp-content/uploads/sites/4/2022/12/QCI-Q4-22.pdf (accessed Jan. 26, 2023).
 “Global warming frequently asked questions,” climate.gov/news-features/understanding-climate/global-warming-frequently-asked-questions (Oct. 29, 2020).
 “Global Average Annual Insured Losses from Extreme Events in Excess of $120 Billion, New Report from Verisk Finds,” verisk.com/newsroom/globalaverage-annual-insured-losses-from-extreme-events-in-excess-of-$120-billion-new-report-finds/ (Sept. 28, 2022).
 “WaterRisk: The first and only predictor of non-weather water claims,” locationinc.com/water-risk-data (accessed Jan. 26, 2023).
 “Facts + Statistics: Homeowners and renters insurance,” iii.org/fact-statistic/facts-statistics-homeowners-and-renters-insurance (accessed Feb. 10, 2023).