Effective October 1, 2023, Rooney Insurance will be located at 5100 E Skelly Dr, Suite 1010 in Tulsa, Oklahoma
Effective October 1, 2023, Rooney Insurance will be located at 5100 E Skelly Dr, Suite 1010 in Tulsa, Oklahoma
Inflation and Supply Chain Disruptions. It’s rare these days that a national news broadcast doesn’t include a story about one or both topics. Your vehicle insurance is not immune from the ripple effects of these economic impact drivers. Now is the time to consider how rising costs impact more than just your operating budget. Reviewing your coverages with your agent well before the renewal is essential during increasing costs, which are organically pushing premiums higher.
Inflation can impact car insurance coverage. Likewise, there are many variables that go into this, and how it could affect the market.
The severity of liability claims has been rising, and medical costs have been increasing for some time now. Additionally, with the continuing rise of medical care service costs, your liability coverage limits won’t go as far. Bodily injury liability, medical payments, personal injury protection, and uninsured/underinsured motorists’ bodily injury coverage pay toward either your own or third-party medical-related costs from an accident. Everyone should ensure their policy has adequate insurance limits.
Individuals or companies buying only their state minimum required limits or slightly higher do not have enough insurance limits. During inflationary times, this deficiency is even further amplified.
It is time to review your policy before you have an accident!
Since we live in a very litigious society where lawsuits are frequently filed when accidents happen, auto liability insurance limits must be kept at a high level to cover high verdicts. Commercial auto insurance policyholders are especially at risk for “nuclear verdicts” (jury awards surpassing $10,000,000). For example, such claims have risen 15% just in the last for years (2017-2021) in the trucking industry. These claims have driven trucking insurance rates much higher. Delivering fees soar when higher insurance premiums are added to rising fuel costs. This contributes to the inflation we all feel in our wallets.
It’s no secret that automobiles, trucks, and car parts are significantly more expensive now than they were a few years ago. During the pandemic, supply chain disruptions and plant shutdowns caused severe shortages of new cars for sale and essential auto parts.
This has driven the value of used cars higher as a result.
Labor costs have also increased significantly, especially post-pandemic, as the demand for skilled labor has outstripped the available workforce. Auto body shops often have to schedule repairs two or three months out.
Because of these changes in the auto industry, the physical damage rates for Comprehensive coverage and Collision coverage have steadily increased, especially in the last two years.
Until the supply vs. demand balance returns and the value of vehicles, both new and used, stabilizes, we believe inflation will continue to drive physical damage insurance rates higher. Adjusting deductibles may help policyholders but will not overcome the full impact of social and inflation-driven rate changes.
Again, today is the time to review your coverage limits and obtain the best value of coverage for the premium spent – not after the accident has occurred.
Rooney Insurance Agency, Inc., headquartered in Tulsa, OK, has provided insurance solutions to businesses both locally and in several states across the USA since 1960. For more information about the firm and its capabilities, please visit www.rooneyinsurance.com.
