It is no secret that insurance rates are going up in Texas.
Auto insurance has been on the rise over the past year but it is not alone, as 2022 has marked substantial rises in homeowners insurance as well.
Consumers are feeling it in their wallets and looking to their home and car insurance agencies for answers.
Based on the research that is being done to explain these rate hikes, here is some pertinent information.
Materials Costs Are Skyrocketing
Whether referring to car parts or building materials, the cost of these materials has been on the rise for some time.
This stems from many raw materials shortages that started during the pandemic.
Now two years later, the auto insurance industry continues to see parts shortages affecting vehicle repair, which keeps the cost of these parts high.
Similarly, homeowners insurance companies are facing the rising cost of construction materials making home repairs costlier.
Between higher demand, reduced supply, and the shipping problems that are still affecting all materials and parts, home and car insurance companies are forced to increase rates as the cost of auto and home repairs rise.
Labor Costs Keep Going Up
On top of the rising costs of parts and materials is the issue of rising labor costs and the difficulties many companies face to retain qualified workers.
This also trickles down from auto repair and construction contractors directly to home and auto insurance companies.
More Claims Being Filed
The number of claims being filed to home and car insurance companies is also on the rise.
In Texas, this is partly due to the number of drivers in the state, especially around more populated cities; however, it is also due to natural disasters like hurricanes and other extreme weather.
With the state still recovering from the devastation of Hurricane Harvey and damage caused by the power grid outage just a few years ago as well as the increasing incidence of severe storms and wildfires, insurance companies have faced an ever-increasing barrage of high-dollar claims.
Inflation Compounds the Problem
To make all of these matters even worse, current inflation rates mean that these rising costs are going up even more due to the devaluation of the dollar.
Car parts and building supplies will cost even more in the coming months, once again affecting the amounts that car and homeowners insurance companies must pay for claims.
Inflation is also reducing home values in spite of elevated repair costs and increasing used car values and rental car costs, all directly affecting the prices paid by insurance companies as they honor their customers’ policy benefits.
Visit With Knowledgeable Insurance Agents
With home and auto insurance on the rise in Texas due to economics, supply and demand, as well as other factors, it is no wonder that many consumers are concerned
Ultimately, the best way for all Texans to keep their home and car insurance premiums as low as possible is to drive safely, avoid accidents, and keep a safe and secure home!
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Drivers and homeowners can reach out to car and homeowners insurance agencies such as Service Insurance Group to discuss their current policies and discover ways to save some money.
If looking for any type of personal or business insurance, the Agents at Service Insurance Group shop for the right personal or business insurance policy to fit individual needs – call them at (979) 300-7345 to get a quote!
