By: Shelby Ford, First Western Insurance Agent
“Why are my insurance premiums increasing?” A question being asked by many clients as we are seeing the insurance market continuing in an upward trajectory, more than it has in the last 20 years. There are many factors that have contributed.
So what is causing all of this, you may ask?
Catastrophic Losses: We are experiencing record amounts of natural disasters today. From hurricanes, floods, and wildfires, these storm frequencies and the increase in severity have a direct impact as they all lead to property damage.
Inflation: Times of high inflation can cause rate increases due to insurance companies experiencing higher claim payouts and operating costs.
Underinsurance: With inflation and the cost of materials increasing, clients are seeing an increase in their personal property, which can correlate with an increase in premiums. It is important to have accurate valuations for assets so you don’t come up short after a loss.
Property Replacement Costs: The cost to replace property is significantly higher than it has been. We have seen a 55% increase in the cost of structural steel and a 35% increase in the price of lumber. There are shortages in material and supply chain disruptions. The premium increase can help offset the increased replacement costs.
Though this information may sound daunting, there is value in knowledge and having an agency that is client-focused and transparent. Our team helps our clients prepare for these changes and can recommend assistance in budgeting for upcoming renewal terms. We are dedicated to providing valuable information and answering any questions you may have. Our main goal is to ensure our insureds have the best coverage at the most competitive rate available.
If you have any questions or need assistance, please don’t hesitate to reach out to one of your local First Western Insurance agents.