The Barrons Roundtable panel provides insight into the increasing pressures on consumers.
In recent years, prices for home insurance and auto insurance have soared in the United States, and many people are having difficulty paying their premiums, and the price hike is expected to get worse.
Record losses from natural disasters, inflation, regulatory and reinsurance issues are all contributing to insurers' moves to raise rates, creating a crisis for consumers.
While home insurance companies raise premiums as much as possible, other states don't raise premiums, squeezing some homeowners and leaving other insurers struggling to find coverage.
Homes destroyed by Hurricane Nicole on November 10, 2022 in Daytona Beach, Florida. Property damage caused by natural disasters is a contributing factor to soaring insurance premiums. ((Photo by: Joe Radle/Getty Images)/Getty Images)
According to a survey conducted last fall by Assurance IQ, 63% of insured Americans experienced an increase in the price of their home or renters insurance in the past year, and 67% experienced an increase in their auto insurance rate. It became clear that he had been attacked. More than half (51%) of those surveyed said they were cutting spending in other areas to make room in their budget to cover the additional costs.
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Loretta L. Warters, a spokeswoman for the New York-based Insurance Information Institute, recently told FOX Business that homeowners' insurance rates have increased significantly as a result of the pandemic and social conditions. US economy.
“Much of the increase can be attributed to supply chain issues and labor shortages driving up home repair and replacement costs, but it is also likely that more people are living in areas prone to extreme weather and disasters. This is also due to increased losses from travel-related disasters,” said Mr. Waters.
Fire damage is seen in Lahaina, Hawaii, Sunday, August 13, 2023. ((Photo by Matt McClain/Washington Post via Getty Images)/Getty Images)
According to NOAA, there will be 23 confirmed weather and climate disasters in the United States this year through September 2023, with losses exceeding $1 billion.
US renters continue to bear the burden as insurance pressure on landlords increases
These trends – rising costs of building materials, appliances, and labor;Increase in insurance losses Items related to abnormal weather. Waters said population migration to disaster-prone areas predates the pandemic and is unlikely to end even after COVID-19 and the global economic disruption it caused fades into history.
“This is why homeowners insurance rates will need to increase in the coming years,” Waters told FOX Business.
Van Jackson checks on the safety of his dog, Jack, who was stranded in a church by flooding along Wright Beaver Creek on July 28, 2022, in Garrett, Kentucky, the day after heavy rain. said Jackson, who owns an auto parts store in town.No flooding (Pat McDonough/USA TODAY NETWORK via Reuters. No resale, no archive required credit/Reuters)
Meanwhile, a recent study by car insurance app Jerry found that the cost of car insurance has risen by 43% in the past three years alone, and a new report suggests even bigger increases are expected. Masu.
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wall street journal This week, we reported that Allstate has been approved to increase car rates by 15% in New York, 17% in New Jersey, and an astonishing 30% in California. California is still considering whether to allow Allstate to raise homeowners insurance premiums by 40%, the paper said.
FOX Business' Erica Lamberg contributed to this report.
