As pandemic-induced inflation and supply shortages continue, countless sectors are experiencing price spikes. The insurance industry is no different. Several insurance companies, including Allstate and Geico, have already begun hiking their rates in line with these trends. But rising prices aren’t the only way the pandemic is affecting the insurance industry. COVID-19 has also encouraged companies to offer more online tools, such as the ability to file and track claims online.
If you’re wondering what these insurance trends mean for your wallet, our insurance and financial experts are here to walk you through the changes. Learn what this year’s insurance trends mean for you and your finances.
The car insurance industry has shifted a bit since last year. Several providers are offering more online tools since policyholders couldn’t do business in person over the past two years. Many large insurance companies already offered online platforms pre-pandemic, but more providers are beginning to add features such as virtual claims processing.
The insurance industry has also shifted in response to inflation. Several providers have already begun charging significantly more in premiums. Healthy levels of inflation cause prices across industries to rise about 2% each year. Currently, inflation sits at around 6.2%—the highest inflation spike since 1990. When the economy shuttered, restaurants, retailers and airlines closed. When these businesses reopened, Americans flocked to them, demand rose, and prices increased.
When buying insurance, the hardest part of the process is finding the right policy for your needs. Additional car insurance coverage increases your car insurance premium, but not having enough coverage could harm your finances if you’re in an accident. If your policy limits don’t cover the total cost of an accident, you may end up having to pay for damages and medical bills out-of-pocket. The median household bank account balance is $5,300, according to the Federal Reserve, while a NOLO survey showed around half of their readers received between $3,000 and $25,000 after an accident. As you can see, paying for a car accident out-of-pocket could significantly decimate your bank account.