How loudly did you gasp at your last insurance bill? We’ve done it. And it’s frustrating because insurance is something we all need to make room for in our budgets. Still, the average premiums for vehicles, homes, health, and other coverage have risen sharply in recent years. But why?
- Inflation: You’re not alone if you’ve raised an eyebrow or two over the price of groceries. Our everyday living expenses have skyrocketed, leaving us less money for other necessities like insurance to cover us if accidents or disasters strike.
- Materials: Wood for homes. Parts for manufacturing vehicles. Everything in between. The costs for the raw materials that go into the homes, transportation and technology we use have all risen in recent years. Those costs get passed on to consumers.
- Healthcare: Between medical costs and increased lifespans, healthcare prices have consistently gone up, too. Prescription drugs, administrative duties, technology upgrades, and more have been added to the line items in our checkups and other procedures.
- Weather: Hurricanes, floods, tornadoes, and other natural disasters cost billions by the time cleanup and rebuilding is finished. And in the Midwest, we’ve suffered from hailstorms, fires, wind, and more. All these events tend to raise premium prices as insurance companies try to recoup their losses over time.
If you’re frustrated with rate hikes and are wondering how to make them more affordable, start by scheduling an appointment with your insurance agent.
- How do things look now? Start by asking for a comprehensive policy overview. Go through each policy and see if it still meets your needs. As your life and circumstances change over time, so too must your insurance coverage.
- Show up prepared. Bring copies of each policy with you, for reference. They can be in printed or electronic form. Whatever helps you follow along. Also, bring a list of questions you have about the policies, so you remember to ask.
- Available discounts. Ask your agent about any discounts that may apply to your policies. It’s common to get discounts for defensive driving courses, which can be taken online. You may also qualify for discounts if you have a low number of claims over the years because that makes you a lower-risk customer for the insurance provider.
- Can you bundle? You may also save money by bundling. Grouping all family drivers under a single policy, for example. Or having multiple kinds of policies with a single provider may get you a discount. Don’t be afraid to ask about all available ways to lower your insurance expenses.
- Pay less often. Another way to shave premiums is by changing your payment frequency. If you can pay a lump sum annually or semiannually, you may get a discounted rate compared to always paying a monthly bill. Of course, this takes some financial planning to avoid a sticker shock when a larger bill hits your checkbook later in the year.
