The insurance industry is facing significant challenges with rates, due to a variety of reasons, so working with an independent insurance agency like Marshfield Insurance is more beneficial than ever. In the past few years, many issues have increased in frequency and scope, helping to facilitate cost increases. Building materials, supply chain issues and labor challenges are driving up costs of home repairs. Between January 2021 to January 2022: Commercial reconstruction costs increased by 6.1%. Residential reconstruction costs increased 7.5%. The total 3-year compounding rate of inflation has moved the base +25% on residential reconstruction costs. Additionally, severe weather events are more frequent and intense. Aon reports the total cost of natural disasters has increased from $41 billion in 2019 to $92 billion in 2021 and will exceed $100 billion in 2022. Supply chain issues are impacting new and used vehicles, creating shortages, and accelerating the cost to replace a vehicle. Consumer preferences for more tech and light trucks has driven more costly, complex vehicles into operation. Used car and truck values are up 47% from pre-pandemic levels. Also, traffic accident fatalities are up 10.5% over 2020. Along with this, the average vehicle repair costs have risen steadily, with the largest increases happening over the previous two years. 2022 is expected to resolve at 13% to 14.5% over 2021. Auto claim costs associated with motor vehicle parts and equipment saw double digit year-over-year increases for 13 straight months and are up 23% from pre-pandemic levels. Additionally, auto repair times now average 31 days nationally. Most insurers purchase reinsurance for catastrophic weather events which provides more stability in their rates. Reinsurance is insurance purchased (or layered) by insurance companies. With catastrophic events costing almost 2.5x more in a four year period, insurer’s reinsurance costs have increased as much as 100% in that same time. It’s important to keep in mind that insurance rates can vary by location, type of coverage, and individual circumstances, and an independent agent can help you shop around for the best rate for your situation. Working with an independent insurance agent can keep insurance rates low because they have access to multiple insurance companies and can shop around for the best rates and coverage options for their clients. Unlike captive agents who only sell insurance from one company, independent agents can compare policies from multiple carriers and find the one that best meets their clients’ needs at a competitive price. This allows for more options and potential savings for the client. Currently Marshfield Insurance represents over 40 different property & casualty insurance carriers. To learn more, contact Marshfield Insurance Agency today!