Most insurance policies have become more expensive, prompting many Americans to review their policies and consider switching providers. (iStock)
With the cost of everything rising — including insurance — Americans are seriously reviewing their policies, hoping for a lower price.
About seven in ten (69.3%) of insureds have begun reviewing their policies, according to the Trusted Choice report. Just under half (45.8%) cite rising premiums as a reason to take a closer look at their policies.
In response to rising rates, consumers are considering making some radical choices regarding their policies. Nearly half of Trusted Choice study participants have considered increasing their deductible to save on monthly payments.
Worse still, 22% have considered ditching some insurance products altogether to save money. Most of those surveyed are also considering switching providers. 83% said they would switch if another company offered them lower premiums.
“We acknowledge that the current environment is driving consumers to choose higher deductibles, switch coverage based solely on cost, or even go uninsured,” said Kevin Brandt, CEO of Trusted Choice. “However, these are often not the wisest or most effective strategies. It is important for consumers to ask the right questions, engage in close collaboration with independent insurance agents, and learn about what impacts their coverage.”
Although you may be tempted to reduce your insurance coverage, or give it up altogether, having the right insurance coverage is vital. To make sure your insurance is right for your circumstances, visit the Credible website to check plans, providers and costs.
Home insurance costs are rising: here’s why
Natural disasters push insurance premiums higher
Climate change is one of the main reasons homeowners and auto insurance rates are rising, as natural disasters become more frequent.
While homeowners insurance premiums are rising 21% across the country, states dealing with floods, wildfires and other natural disasters are experiencing the highest rise in premiums, the Policygenius study shows.
As natural disasters become more common, so do insurance claims. This particularly hurts the auto insurance industry, which is having a hard time making ends meet. In return, insurance companies raise prices for customers.
With different coverage amounts, it’s important to research to find the right home or car insurance plan that fits your needs. Visit the Credible website to start the process and maximize the value you gain from your insurance policy.
Auto insurance premiums and claims still on the rise: study
Inflation and false claims also contribute to higher rates
Just like other goods and services, inflation causes insurance price prices to rise. Insurers need to consider the bottom line and how inflation affects it. Mutual freedom explained. As the cost of materials needed to satisfy claims rises, insurance companies must raise premiums to meet this demand.
However, inflation is only part of the story. States with high claims rates face a rise in fraudulent claims, which leads to higher insurance premiums for everyone. Florida is one state particularly vulnerable to these fraudulent claims, according to the Insurance Information Institute (III).
“These two factors (legal abuse and benefit allocation abuse) create loss losses, and contribute significantly to the net underwriting losses of the few remaining insurers in the state,” III CEO Sean Kevelighan said. “What’s worse is that insurance is not only becoming more expensive, but also unaffordable to homeowners and drivers.”
Comparing multiple insurance quotes could potentially save you hundreds of dollars per year. It’s very easy to get a free quote in minutes through Credible’s partners here.
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