Why Your Insurance Bill Exploded
If you've renewed an auto or home insurance policy recently, you've likely experienced sticker shock. Auto insurance premiums have risen roughly 22% year-over-year nationally, making it the fastest-growing major CPI category. Home insurance is even worse in certain states — Florida, Louisiana, Texas, and California have seen 30-60% increases as insurers reprice for climate risk.
The causes are structural, not temporary. For auto insurance: vehicles are more expensive to repair (sensors, cameras, advanced electronics), medical costs from accidents continue rising, and the frequency of severe claims has increased. A fender bender on a 2024 vehicle with ADAS sensors can cost $8,000-$15,000 to repair versus $3,000-$5,000 on a 2015 model.
Home Insurance: The Climate Premium
Homeowners insurance is being repriced for a new reality. Catastrophic losses from hurricanes, wildfires, hailstorms, and flooding have driven industry losses to record levels. Several major insurers have pulled out of high-risk markets entirely — State Farm and Allstate stopped writing new policies in California. In Florida, the market has consolidated around smaller, less-capitalized insurers charging dramatically higher rates.
For consumers, the options are limited: shop aggressively (switching insurers can save 10-20%), raise deductibles, bundle policies, and invest in loss-prevention (impact-resistant roofing, fire-resistant landscaping). But the broader trend is clear — insurance costs are not returning to pre-2020 levels.