Home and Auto 2024 Outlook

I hope this message finds you well. I'm reaching out today to provide a few insights into the homeowners and auto insurance landscape as we move into the first few months of 2024. For both home and auto insurance, all indicators point to premium increases, although rates are expected to stabilize late in the year.

Even with this outlook, I am here to help you stay within your budget while ensuring you have the coverage you need.

Automobile Insurance in 2024

Here are several factors that may be responsible for a rise in auto insurance premiums this year:

• An uptick in thefts: Thefts remained on the rise in the first half of 2023 – up 2% compared to the first half of 2022. That’s after over one million vehicles were stolen in the U.S. in 2022, the highest since 2008, with a 7% year-over-year increase.
• The UAW strike: Based on past events, the fall 2023 auto workers strike may lead to longer cycle times and non-OEM part price increases. In fact, on this side of the 2023 strike, Ford has already said that the deal struck with workers will eventually add $850-900 to the cost of each vehicle produced.
• Another rise in vehicle repair costs: After double-digit vehicle repair cost increases in 2021 and 2022, 2023 saw a modest 4.6% increase through Q2 in 2023. Yes, it’s a better increase, but one that is passed on to consumers nonetheless.
• Limited inventory: If you've noticed limited inventories when car shopping – that's impacting insurance, too. Limited availability inflates car values and, subsequently, insurance premiums.
• Higher vehicle replacement costs: Vehicle replacement costs soared nearly 45% between 2020 and 2023, outpacing inflation by roughly 30%. This upward trend will continue to impact the cost of comprehensive and collision coverage in your auto policy.
• Severe weather: Natural disasters cost insurance companies millions in losses. To make up for these losses, insurance companies increase premiums in the ensuing years.
• Higher medical expenses: Medical costs are also on the rise. For auto insurers, that means higher payouts for bodily injury liability claims and, again, higher premiums for auto owners.

It’s likely that these factors, alone or in combination, will continue to drive auto insurance prices upwards throughout 2024.

Homeowners Insurance in 2024

Additionally, homeowners insurance rates in 2024 are likely to rise due to the following trends:

• Increase in natural disasters: The significant uptick in natural disasters in recent years has increased claim severity and frequency, increasing premium rates. In fact, since the 1980s, natural disaster losses have increased by almost 700%. This trend will likely persist in 2024 as insurance companies face higher reinsurance costs.
• Increasingly cautious insurance companies: In the wake of storms and wildfires, insurers opt not to renew policies in high-risk states or abandon states like Florida and California altogether.
• 2023 rate hikes: Two of the biggest insurance companies — USAA and Farmers — hiked rates nearly 15% in many states. The other eight largest companies had a 6% to 10% increase in rates. As of yet, no evidence suggests increases will taper in 2024.

Despite these challenging outlooks, there are measures you can take to navigate rising insurance costs in 2024: Bundle your home and auto, keep your coverage up-to-date, and schedule a policy review so we can check for new discounts and shop your policies with multiple carriers. In the meantime, don’t hesitate to reach out if you have questions or want to discuss how you can stay lean but well-insured in 2024.

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