Car insurance rates continue to inch upward, while homeowner’s insurance rate increases are slowing, according to figures released by U.S. Department of Labor.
Hey…at least both aren’t going up, right?
That is not to say homeowners insurance rates are going down, just that insurers have leveled off on the number of rate increases. I think we can still call it a “win.”
The Consumer Price Index (CPI) revealed that car insurance rates have been increasing steadily over the past few months.
In fact, car insurance premiums increased by five percent in 2010, thanks in part to higher volume of new car and truck sales.
Meanwhile, homeowners and renters insurance premiums increased 3.5 percent in 2010, but the increases have slowed of late.
Increases dipped to just 1.9 percent in December and 1.5 percent in January.
What Can We Expect In The Future?
According to Meyer Shields, a financial analyst for Stifel Nicolaus, car insurance premiums have been rising much faster than loss costs for about the past two years.
And because poor underwriting returns means State Farm will have to raise rates, competitors are expected to follow suit.
However, any increases by State Farm could benefit Allstate, Progressive and GEICO, as consumers search for less expensive policies, he suggested.
This is not unlike State Farm lowering property insurance rates in Florida a few years back in order to sell more policies, then suffering severe losses due to Hurricanes, and finally attempting to carry out huge rate increases to recoup their losses.
At one point, State Farm threatened to stop selling homeowners insurance in Florida altogether when the state department of insurance would not approve the vast increases in premium.
It is recommended you speak with a local independent insurance agent to determine if you are getting the best deal on both your home and auto insurance.
Read more: How insurance companies make money.