Have you noticed that your insurance premiums keep going up every year? It might seem like insurance companies are just trying to take your money, but there are actually a few reasons why this happens.
First of all, insurance companies have to pay out more and more money for claims every year. This is because the cost of medical care, car repairs, and other things that insurance covers keeps going up too. Including the uptick in claims per year, insurance companies have to pay out more and more money, which means they need to charge more in premiums to make up for it.
Secondly, insurance companies have to keep up with inflation rates. Inflation is when the prices of goods and services increase over time. This means that the insurance company has to charge more money just to keep up with the rising costs of things like medical care, car repairs, and construction.
Finally, insurance companies have to make sure that they have enough money to pay for unexpected events like natural disasters. For instance, if Colorado has damaging natural disasters, one after another, the insurance company needs to have enough money to pay out claims to everyone affected. With the Marshall Fire in Superior and Louisville alone, more than 1,000 families were affected which resulted in millions upon millions of dollars to be paid out by insurance. To make sure they have enough money, the insurance company might need to raise premiums a little bit each year.
So while it might be frustrating to see your insurance premiums keep going up, there are good reasons for it. The insurance company is just trying to make sure they have enough money to pay out claims and keep everyone protected.