Why auto and homeowners insurance are going up in Massachusetts, and how you can save
BOSTON - What in the world is happening to insurance costs? As bills roll in, consumers are noticing their homeowners insurance and auto insurance costs are increasing - a lot.
With Jake and Flo, Emu and the Gecko, the ads may be fun; but the bills won't make you laugh.
Finding someone upset about a pricey policy is easy. Tom Cappadona of Attleboro has seen a hefty hike in his homeowners insurance.
Huge premium hikes
"Last year was $1,500. This year it's $2,072. If it was $100, I wouldn't be talking to you. But $500? That's substantial."
It's a 33% hike, even though Tom says he hasn't filed a claim in years. Tom laughed as he displayed an email he got from the insurance company that jacked up his bill. "I got this email saying, 'Impressive Thomas! No claims. Thank you for being committed to safety'."
What's driving insurance price increases?
So what's driving the price spike for auto insurance and homeowners insurance?
For cars, new technology means safer cars. Sensors in the bumper. Sensors in the windshield. Sensors everywhere. It also means more complicated repairs.
The average new car costs $48,000 and the average cost of fixing a banged-up car has soared 36% in five years. For the first time ever, that price tag is close to $5,000.
Bigger insurance payouts mean bigger premiums
David Gagin, an agent at Fitts Insurance in Southboro says big payouts mean bigger premiums. Much bigger. "This by far the biggest increase I've seen in 30 years," he said.
For many people, these prices are just budget busters. Car insurance was up 20% in December compared to the December of 2022. Same thing for homeowners insurance and four years ago, the average cost to insure a home was $1,100 and now it's $1,700.
For homeowners like Cappadona answers haven't been easy to come by. "So I called up my insurance agent and I asked why. Originally, I got the 'well, everything has gone up.' Yeah I understand everything has gone up, but I haven't had a claim," he said.
Blame the weather
Tom hasn't filed a claim, but many people across the country have thanks to the weather. When homes are damaged or destroyed anywhere in the country it affects you. Every hurricane, wildfire, flood, or blizzard brings astronomical costs to insurance companies. When they pay more, you pay more and maybe you've noticed there have been a lot of catastrophes.
NOAA just published its 2023 disaster report. There were a record 28 weather disasters that individually caused at least $1 billion in damage. In total, those weather events had a record-breaking price tag of about $93 billion. Also, just like cars, homes are more expensive to fix now.
"Ten years ago, if a tree falls on your deck it might be $25,000. Now it's $40,000 and it takes longer because you can't find anyone to do the job," said Gagin, who has some tips for getting a better policy rate.
How to save money on insurance
Always shop around for better insurance rates. Gagin says his insurance agency can check in with seven different insurance companies to try to save you money.
The differences in prices can be substantial. "For a $500,000 house you might see a $1,000 difference," Gagin said.
Also, bundle your car and home for a discount and maintain your home. For instance, if you have a rotting tree on your property, take care of it before it comes down on your roof. Avoid potential claims in any way you can.
A couple of more tips: raise your deductible and sign up for automatic payments. It all helps but shopping around is most important. It's what Tom Cappadona did.
"Go to your insurance agent. Ask what they can do. Search other rates. Search other companies," he said. "It really is pretty easy."
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