A couple years ago, major insurance corporations were hyper focused on making the consumer aware that “15 minutes could save you 15% or more on car insurance.” Now, corporations are focused on informing the consumer on how great they are and why policyholders need their insurance. Commercials are centered around how the company can’t save you money, but on how funny or comedic they can be. More of a popularity contest.
State Farm has some notable commercials with Patrick Mahomes and Aaron Rodgers, both are notable NFL stars who make millions of dollars as a salary (according to NFL.com). On top of these huge salaries, these stars have estimated $2-3 million dollar deals with State Farm to star in commercials. How do they pay for them? Their rates are going up due to supply and demand of products and parts, but also to subsidize the income for these media sponsorships. Other companies such as Erie and National General focus on the consumer and what benefits the consumer has using their insurance.
Rates were on the rise in 2022 and that trend will most likely continue in 2023. The most common factors affecting the increase are inflation and supply shortages. Let’s take a look into this issue for home and auto insurance separately through the eyes of Nationwide.
Auto:
- Inflation and supply shortages
- Appetite for new and used vehicles is increasing.
- INCREASE in the cost of automobile parts
- SHORTAGE of technicians
- INCREASE in car rental prices
- Changing consumer habits
- INCREASE danger on the roads
- More people are driving than during the pandemic since stay-at-home orders have been lifted.
- INCREASE in reckless driving
- Distracted driving leads to 2800 deaths and 400,000 people injured per year
- INCREASE in accident severity
- 12% increase as drivers turn to the roads now more than ever
Home:
- 165% INCREASE in plywood costs
- INCREASE in copper pipe costs
- INCREASE in skilled labor wages
- INCREASE in lumber costs
- INCREASE in structural steel costs.
Rates are increasing, let us shop the market for you! Call one of our insurance advisors today @ 919-779-5115.