Why Insurance Premiums Are Going Up in 2023

Have you ever looked at your monthly home and auto insurance premium statements only to find that you have to pay more than expected?  

The winds of economic change are blowing stronger than ever — and they’re blowing many costs sky-high. As costs rise and labor shortages ensue, a ripple effect transpires across the board, affecting the prices of your premiums and deductibles. 

Why is this happening? Join us as we unravel the economic factors contributing to your high auto and home insurance premium costs. 

Home Insurance Premiums: The Story Behind the Spiral

A myriad of factors are converging to fuel the flames of increased premiums. The 25% surge in lumber prices and 35% increase in asphalt roofing costs have made a dent in homeowners’ wallets. 

These escalated costs — combined with a staggering 37% increase in construction material prices since 2019 — are leaving a marked impact on the insurance industry.

However, that’s not all. Supply chain issues and labor shortages have led to a staggering 340,000 unfilled construction jobs. This development has left a void in the housing sector, contributing to escalating labor costs. 

This labor pinch further amplifies the pricing chaos, pushing home costs 18% higher since 2019. This figure makes the 2023 inflation situation seem negligible by comparison.

Auto Insurance Premiums: What’s Driving Costs Over the Hill? 

Just as homeowners navigate a landscape of shifting sands, car owners are embarking on a parallel journey. Auto insurance premiums are embracing a new normal, and the reasons behind the rise mirror the home insurance tale. 

Supply chain woes and surging labor costs in the automotive industry have set the stage for this surge. The intricate web of interconnected industries has left its mark on the automotive world, and insurance premiums are not safe from reverberations.

For this reason, auto insurance isn’t immune to the outpacing tide of inflation. Vehicle costs have soared 18% since 2019, painting a clear picture of the uphill battle that insurers and policyholders are facing. With vehicle parts and equipment prices scaling 30% higher than they did back in 2019, the financial implications are far-reaching.

The Wildcard: Mother Nature’s Fury

We can point to economic and market shifts all we want, but there’s a wildcard at play that’s reshaping the insurance landscape in unforeseen ways. 

The year 2023 has ushered in a higher frequency of weather disasters, with storms and heavy snow becoming more common. These events are leaving a trail of destruction and driving a surge in insurance claims. 

From homes battered by storms to cars caught in the crosshairs of heavy winders, the frequency of repairs is both frequent and costly.

Let Jensen-Sundquist Shelter You From Confusion and Drive Uncertainties Away

As homeowners and car owners, you must always brace yourself for a future that’s both uncertain and dynamic. Fortunately, by understanding the currents shaping insurance premiums, you take the first step in charting a more secure course for yourself and your family.

Let us be your partners as we shelter you from confusion and drive away uncertainties. At Jensen-Sundquist, we offer affordable home and auto insurance policies backed by impeccable customer service. 

Reach out now for a free quote and secure your future today.