Skyrocketing home and auto insurance rates are weighing on American households as the average prices for both are projected to have their biggest spikes in over five years.
While the increase seen in 2022 was the greatest uptick in both types of insurance in recent years, an S&P Global Market Intelligence analysis predicts an even greater jump as prices surged by double-digit amounts within the first seven months of 2023.
According to the S&P data, the average cost of insurance increased by 11 percent in 2022, with 2023 experiencing the same increase by the end of July.
Analyses from Forbes Advisor show that the average cost of home insurance is $1,582 a year for $350,000 worth of coverage. The average vehicle owner now pays $2,150 a year for their automobile to be fully covered.
Added up, the average American home and car owner can expect to spend more than $3,700 a year on insurance alone.
The costlier premiums are being driven by multiple factors, including more extreme weather, car accidents, and inflation.
Texas has seen the highest cumulative rate increase, experiencing a 37.6 percent growth in premium rates over the last 20 months.
The Texas Tribune recently reported that insurance companies across the state “have dramatically increased” home insurance rates this year as reports of climate change “spooks” executives while “inflation pushes up costs to rebuild after natural disasters.”
Inflation has dramatically surged since President Joe Biden took office in 2021, with the average U.S. household spending an additional $11,400 per year just to maintain the same lifestyle they had before his administration.
While the average hourly pay for workers has increased by 13.6 percent since January 2021, inflation has increased by 17 percent over the same period, a CBS MoneyWatch report revealed.
