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Insurance policy holders seek better deals elsewhere as rates are hiked

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Recent increases in insurance premiums are driving policyholders to take action they typically avoid: shopping around for more affordable options. Traditionally loyal to their providers, customers are reacting to substantial price hikes, including car insurance premiums rising over 20% in the past year, according to government figures. Home insurance costs, often hidden within monthly mortgage payments, are also climbing.

Factors Behind the Premium Hikes

Insurance companies cite several factors contributing to these increases:

  • Increased Repair Costs: Higher expenses for home and auto repairs are a significant factor.
  • Climate Change Impact: Rising storm damage linked to climate change is affecting policyholders nationwide, not just in disaster-prone areas.

Real-Life Impact

Andy Palen, residing near Milwaukee, saw his homeowners’ insurance rise by $500 despite no claims, prompting him and others to explore alternative insurers and potentially saving hundreds of dollars monthly, as highlighted by independent insurance broker Kate Ferri Dawson.

Changing Consumer Behavior

Despite long-standing loyalty, current high premiums are driving more policyholders to shop around. A record 42% of auto insurance customers and a growing number of homeowners are seeking better deals, driven by necessity rather than loyalty discounts.

Consumer Advice

Doug Heller from the Consumer Federation of America advises consumers to compare policies with identical coverage and deductibles for informed decision-making. Even if switching insurers isn’t the immediate outcome, shopping around signals insurers that consumers are price-sensitive, potentially curbing future premium hikes.

Insurers’ Response

Insurers are closely monitoring consumer shopping behaviors to adjust pricing strategies based on extensive data. While some states advocate for risk-based pricing, ensuring transparency remains critical in today’s volatile insurance market.

Stay Informed

As insurance dynamics evolve, staying informed and exploring all options can help navigate these challenging times effectively.

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