Everything is becoming more expensive due to inflation, and insurance providers are passing these increased costs along to the customer.
According to Brian Pattillo, vice president of Goosehead Insurance, "inflation affects the cost for insurance companies to pay off a claim, when both supplies and labour become more expensive."
"The same collision that cost your car $1,500 in damage last year could cost you hundreds more this year."
He stated, "In order to pay claims, insurers must invest the money they get from premiums in order to pay out subsequent claims."
The value of these fixed income investments has decreased, thus the corporation must earn more revenue to cover the costlier claims.
The only way to close that gap is to raise customer premiums.