Historic Inflation Impacting Home & Auto Insurance
Preparing for historic inflation-
A perfect storm for inflation is brewing – fueled by increased costs for material, labor and supply shortages, and shipping delays. And anyone who owns a home, rents or buys a car or has a claim will feel this storm’s impact.
As prices increase, so do the chances you’ll need to discuss / review your current coverage’s. Coverage limits that fit yesterday may not be sufficient for tomorrow, leaving your home and auto more vulnerable in case of a claim.
Inflation is threatening to reach unprecedented highs in 2022. As a result, costs are rising across the country impacting carriers and customers.
To help you address questions or concerns you may have, we have gathered resources about how inflation impacts insurance and what can be done to help ensure you’re protected.
Why costs are rising
It’s impossible to point one single reason for inflation. Understanding why costs are increasing at historic rates means considering these factors as a starting point to help explain why:
Home insurance
Auto insurance
Higher prices for used cars – 40%
Higher prices for new cars – 12%
repair costs – 15%
Increased labor costs – 8.2%
Increase in rental car costs – 30%
Has your coverage kept up with inflation?
Rising replacement costs means what used to be covered by your policy may no longer be sufficient. This can impact everything from the cost to rebuild your home to the amount of rental car coverage you’ll need to avoid paying out of pocket.
For Example: Bill’s policy has $500,000 in Coverage A to rebuild his home. However, Bill may now need $600,000 in coverage with the jump in materials and labor costs. You can find additional information at this Citizens infograph.