Let's face it, Texas.
Prices of just about everything has gone up quicker than a flash flood in the middle of June.
As the cost of living goes up, so do insurance premiums. Inflation impacts insurance in two ways: the direct way and the indirect way.
Direct Impact
The direct way is when companies raise their prices to adjust for the increase in the cost of goods and services.
When this occurs, it's typically in response to an overall increase in the cost of living, as measured by the Consumer Price Index (CPI).
Indirect Impact
The indirect way is when inflation causes people's incomes to go down, making it harder for them to afford their current insurance premiums.
Inflation can also make it harder for people to save money for retirement, which can impact their ability to pay for insurance in retirement.
Whether direct or indirect, there are a few things you can do to help offset the impact of inflation and at least make you feel like you have taken a little control back against the price increases on your insurance premiums and other areas:
- Review your budget and make sure you are not overspending on unnecessary expenses.
- Make sure you are getting the most bang for your buck by shopping around for the best rates on insurance.
- Invest in yourself by taking courses or learning about new technologies that can help you save money.
- Consider switching to a less expensive insurance company.
- Increase your deductible to lower your premium.
- Keep an emergency fund so you can cover unexpected expenses.
- Review your insurance coverage periodically to make sure it still meets your needs.
- Stay healthy and don't smoke, as this can help you get lower premiums.
Bottom line, you can do a lot to offset the impact of inflation, but it's important to stay on top of your finances and review your budget regularly. If you have any questions about how inflation may impact your insurance premiums, contact Insurance For Texans. We'll listen.
We'll also try to figure out the best solution for you. As an independent insurance agency, we have the ability to do just that.
That's how it should work between agent and client.
That's True Texas.
Ron Wadley is an owner and General Solver of Problems for Insurance For Texans. Ron is a resident of North-East Tarrant County in the Dallas-Ft Worth area. He loves riding his many bikes and watching his Baylor Bears play football and basketball. Send him your insurance questions at ron@insurancefortexans.com.