Money Smarts Blog

Think about the things that matter most to you: Family, kids, pets, your home, probably even your vehicle. It’s safe to say you have a lot to protect, which is why it’s so important to keep your insurance up to date.

Here’s the bad news: Home and car insurance premiums have steadily trended upward since 2021, with a 24% rise in auto insurance in 2023 (Bureau of Labor Statistics) and a 21% increase in home insurance premiums from May 2022 to May 2023 (Policygenius). I’ve been in this industry for 15 years and have never seen anything quite like it. To make matters worse, there’s nothing we can do about it.

So, what’s causing all this sticker shock?

The past handful of years have seen an increase in extreme weather events across the country, like tornadoes, floods, hurricanes and more. Naturally, people who experience damage file a claim with their insurance, who base their rates on risk. When more claims are filed (particularly in a concentrated area of impact), it starts to drive up rates. Here in the Midwest, our roofs take a beating from the storms that roll through — and we’re seeing members get their claims denied or even refused coverage for roofs, particularly those older than 10 years.

Take IHMVCU member Larry H., for example. When he bought his house in 2014, the home inspection (which included a roof inspection) went off without a hitch and gave no indication of obvious flaws or damage. Imagine his surprise, then, when Larry submitted a claim to AAA after a hailstorm last year and was denied because of “old hail.”

 “I cancelled everything with AAA, changed to IH and got my roof replaced for $12,700,” he said. “They’ve saved me over $1,500 a year from what I was paying. The whole office has been very understanding and accommodating. I’m very happy with IH.”

Not only are rising insurance rates affecting homeowners; landlords are feeling the squeeze, too. IHMVCU member Laurie K. owns a rental property in the Quad Cities and was surprised to see how much property insurance went up last year. First things first, she called her agent to go over her options.

“Pat worked up quotes on our rental property, autos and our existing home, changed some things around and ended up saving me probably $2,000,” Laurie said. “I can’t say enough good things about his customer service and how he helped.”

We’re not miracle workers over here at IHMVCU, but we do know a thing or two about insurance — and we’re here to help. Here are some more tips to help you navigate this unheard of insurance climate we find ourselves in today:

Call your agent first. Let me say it a little louder — CALL YOUR AGENT FIRST. I can’t overstate how important this is. Once you have an adjuster come out, your claim has been filed and could affect your premiums for the next five years. But your local agent might have some handy suggestions, like getting a contractor to look at your roof first.

Don’t have an independent agent? Get one. IHMVCU Insurance Services is an independent agent that scouts out the best insurance rates across seven different insurance carriers. By shopping around (which you should plan to do every 2-3 years), you can be confident knowing you’re striking a good balance between cost and coverage. On the flipside, “captive” agents — those who work solely for one company — can only change your price by changing your coverage.

Consider bundling. It’s not guaranteed, but bundling your auto and home insurance is likely to save you some money. Keep in mind your rate will be affected by several factors, including your unique situation, type of coverage, where you live, credit score, etc. As with anything, be sure to compare rates and coverage to help determine which can give you more bang for your buck.

Make sure you have the proper coverage. The past several years have seen a derecho, a pandemic and sky-high inflation. If you had a rebuild value on your home of $200,000 five years ago, that’s probably not the case now. Talk to your agent to make sure your rebuild/replacement costs are up to date. It might not save you a ton of money, but it’ll make sure you’re properly protected in the event the unthinkable happens.

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