First, a look back at 2022; then, what you can expect in 2023.
A Look Back to 2022
Unfortunately, just like everything else, home and auto premiums were on the rise in 2022.
- Home insurance premiums increased an average of 12.1% from May 2021 to May 2022. Record inflation, extreme weather events, and aging homes in need of extensive updates and repairs contributed to the double-digit increase.
- Auto insurance premiums also increased by an average of 4.9% in 2022 due to record inflation, lingering supply chain issues, and the rising cost of healthcare and auto repairs.
A Look Ahead to 2023
While the Federal Reserve is trying hard to curb inflation’s impact, insurance experts expect little relief for home and auto insurance consumers in 2023. Here are a few early trends and statistics to keep in mind:
- In general, consumers should expect a “hard market” in 2023. A hard market occurs when policy premiums increase and availability decreases. It’s an indication that insurers are facing higher costs of doing business and are becoming more selective in who and what they’re willing to insure.
- In January 2023, ValuePenguin reported that the average cost to insure a home in the U.S. was $126 per month or $1,512 per year. Remember that prices will vary significantly by ZIP code, county, and state.
- Also, according to ValuePenguin, auto insurance premiums are expected to increase by 8.4% in 2023, bringing the average cost of car insurance to $1,780 per year for U.S. drivers.
- Despite the $7,500 tax credit for qualified EVs, insurance for new electric vehicles will cost 28% more than new gasoline-powered cars. That said, if you’re considering an EV in 2023, it’s important to consider insurance premiums in light of potential savings.
While rising premiums in 2023 may be concerning, we are here to help you navigate this changing market. One of the benefits of working with us is that we have access to multiple insurance carriers and can shop around for the best rates.
If you have any questions or concerns, please don’t hesitate to reach out. We are happy to review your current coverage and see if there are any opportunities to lower your premium.