Page 2 - AAA Now! – AAA Northway – Fall 2022

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Expect Higher-Than-Normal Home and Auto Premiums
Historic inflation and other contributing trends have been driving up costs related to the repair and replacement of homes and vehicles – and these higher costs are forcing carriers to increase home and auto premiums.
Higher building materials costs and a skilled labor shortage are a reality.
If you’ve shopped at any home improvement store lately, you’ve probably noticed that the price tags on building materials have risen dramatically. According to the National Association of Home Builders, in
the first year of the pandemic, lumber prices alone jumped 42%. Steel mill products rose a staggering 81% in the first three quarters of 2021. Higher material costs naturally lead to more expensive bids on home repairs and new construction.
To make matters worse, the home-building industry is facing a shortfall of at least 200,000 skilled trade workers, which is driving up construction-related labor costs. About 60% of surveyed builders report a skilled labor shortage. Combined with the higher cost of construction materials, this has been making home
claims much more expensive for carriers.
Supply chain issues and more frequent and severe
car accidents are driving up the average cost of claims. An ongoing shortage of microchips and other
critical parts like wiring harnesses, plastics and glass are making it more costly to repair or replace a vehicle after an accident.
Automakers recently reported that, as of August 2021, U.S. dealers had fewer than 1 million new cars on their lots, 72% less than they did in August 2019
– and that scarcity is revving up costs. According to CNN Business, between October 2020 and October 2021, new car prices rose 10.6% – the sharpest 12-month jump since 1975 – while used car prices skyrocketed nearly 32%.
At the same time, accidents have become more frequent and severe in the past year, increasing
the number and cost of auto claims. In the first six months of 2021, auto accident fatalities increased 16% from the previous year, and nearly 2.5 million people sustained injuries requiring consultation with a medical professional.
What can I do to keep my costs down?
Unfortunately, these trends are here to stay,
at least in the near future, as the majority of insurance carriers have entered a “hard market” where, in many cases, the rates they are charging are too low to pay for the claims that are happening and still make a reasonable profit.
As a AAA member, your best chance of savings is to talk to an agent at AAA Insurance to see about your options to keep your insurance costs down.
Contact AAA Insurance at 866-222-0937.
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FALL 2022
Now!