Why are my rates going up in Cumming, Ga? I do not have any tickets or accidents! We hear these questions every day and we want you to know that we completely understand. We need you to be aware that our agency, Bradford Turner Insurance Group, is not in any way in control of insurance rates. These rate increases are affecting all carriers in the state of Ga and throughout the nation. We are working diligently with EVERY renewal to try and keep your rates in check. The $7 eggs at the grocery store, gas prices, interest rates on mortgages and house prices themselves are all rapidly rising at a pace that many cannot keep up with. We truly have your best interest at heart and understand that inflation, among other things, is negatively impacting everyone. We are listening to you and want to shed some light on the root causes of the issues.
Please read the following to better understand a few of the reasons why auto rates are increasing in Georgia:
- Increasing frequency and severity of accidents: When the number of accidents and their severity are on the rise in Georgia, it leads to higher claims and payouts by insurance companies, which in turn increases premiums for drivers. “Despite significant rate increases being implemented by most national and regional insurers, rates are not keeping up with accident loss costs paid out by auto insurers.” “Several companies are reporting record-level private passenger auto underwriting losses for 2022, leading to the industry’s worst personal lines underwriting performance in a decade” (iii.org). Fatality accidents are up almost 60% nationwide compared to pre-covid levels. Georgia has also become the number 1 state for lawsuits, which is why having adequate coverage including an umbrella policy) is so vital Georgia’s judicial system was recently called a ‘hellhole.’ Here’s why (thegeorgiasun.com)/.
- Rising medical costs: With the costs of medical treatment and rehabilitation going up, the cost of treating injuries sustained in a car accident is also increasing. This can lead to higher insurance premiums to cover costs.
- Increasing vehicle repair costs: The cost of repairing damaged vehicles is also on the rise, due to the use of technology and specialized parts in newer vehicles. This can result in higher insurance premiums to balance costs. The price to repair a vehicle increased 40% from 2018 to 2022, according to a UK-based warranty and insurance provider.
- Weather-related events: Georgia is prone to severe weather events, such as hurricanes and tornadoes, which can damage vehicles and increase the number of claims filed. This can result in higher premiums, as insurance companies need to recoup their losses. According to the III, tornadoes and thunderstorms are the most common and damaging natural catastrophes in the United States, with annual insured losses averaging about $17 billion.
- Insurance fraud: If insurance fraud is on the rise in Georgia, insurance companies may need to increase premiums to offset the losses incurred due to fraudulent claims.
Please read the following to better understand a few of the reasons why home rates are increasing in Georgia:
- Increase in natural disasters – Georgia is prone to hurricanes, tornadoes, and flooding, which can cause a significant amount of damage to homes. As the frequency and intensity of these disasters increase, insurance companies may need to pay out more claims, leading to higher rates for policyholders. There were eighteen weather disaster events in the U.S. in 2021 with losses exceeding $1 billion in damage (www.ncei.noaa.gov). With an annual average of seven events from 1980-2020, the increase in severe weather caused 39% of all U.S. home insurance claims. Additionally, the roofing contractors banging on your door telling you that you have wind and hail damage after every storm that passes through generates a lot of sometimes fraudulent claim activity.
- Cost of materials – The cost of building materials has increased over the years, particularly in the wake of the COVID-19 pandemic. This means that it will cost more to repair or rebuild a house in case of damage, which can increase insurance rates. On average, the 12-month increase in material costs was 26.1%, by far the highest increase ever recorded in an NAHB survey. The previous record was 6.1% in 2017 (NAHB).
- Aging infrastructure – Aging infrastructure can lead to water damage, plumbing issues, and other problems that can increase insurance claims. Insurance companies may need to charge higher rates for homeowners to offset these costs.
- High crime rates – Crime rates in certain areas of Georgia may be higher than other areas, leading to more burglaries or thefts. This can result in higher rates for homeowners in those areas.
- Claims history – If a homeowner has a history of making claims, insurance companies may view them as a higher risk, leading to higher premiums. The average cost per claim is $79,785 and 1 in every 350 homes will be affected by claims.
Okay, now that I know the reasons behind rate increases, what can I do?
- Bundle all your policies with one company to receive a discount (if possible).
- Install safety devices such as alarms, temperature monitoring, water detection sensors and fire extinguishers for a discount.
- Take a defensive driving course, ask us about the free one we offer!
- Consider increasing your auto deductibles to a minimum of $1,000 for collision claims and $2500 for home insurance claims.
- Take advantage of telematics app discount programs with auto insurance.
Bradford Turner Insurance Group is here for you, and we appreciate your trust in us and your patience during these trying times.