6 Reasons for insurance premium increases

As if the insurance business weren’t complicated enough, consumers can be especially vexed when the cost of their coverages rises, even though they may not have filed a claim recently.

Consider that about one in three car insurance customers experienced a rate increase in 2023, according to J.D. Power  — a trend that has negatively impacted insurance customer satisfaction. “Overall customer satisfaction with auto insurers has plummeted this year, as insurers and drivers come face to face with the realities of the economy,” Mark Garrett, director of insurance intelligence at J.D. Power, said in a prepared statement.

Helping insureds better understand how their policies are priced can go a long way toward fostering better insurance customer experiences. To that end, Frankenmuth Insurance recently published a blog post titled, “The cost of insurance is rising. Here’s why.”

Frankenmuth outlined the following six reasons why consumers are facing higher insurance prices in 2024:

• Inflation paired with labor shortages;
• Increased vehicle repair and replacement costs;
• Increased construction costs;
• Costly severe weather events;
• Riskier driving behaviors; and
• More insurance-related litigation.

“There’s no single factor that’s led to increasing rates,” Frankenmuth concludes. “But luckily, there may be ways to work with your local, independent agent and reduce the cost of your policies.”

See also:

• Are insurers ‘out of step’ with market demands, challenges/?
• Techniques for commercial real estate pros to manage insurance costs
• Most trusted U.S. home insurance companies in 2024