Dave Ramsey discusses the Rising Cost of Insurance: What’s Going On?
If you’ve noticed your home and auto insurance rates creeping up—or skyrocketing—you’re not alone. According to Dave Ramsey and George Kamel at Ramsey Solutions, insurance costs have soared due to a mix of market conditions, inflation, and increased claims.
In this post, we’ll break down:
- Why insurance rates are rising in 2024
- The key factors driving home and auto insurance increases
- Dave Ramsey’s best tips for saving money on insurance
Let’s dive in.
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Why Are Insurance Rates So High in 2024?
It’s not your imagination—insurance rates are climbing fast.
- Home insurance rates have increased 23% in the last year.
- Car insurance premiums have surged 39% since 2019.
- In the UK, insurance costs have jumped an eye-watering 64%.
So, what’s causing this massive spike?
1. More Natural Disasters = More Claims
Catastrophic weather events have led to record-breaking insurance claims.
- Hurricanes like Ian and Irma have devastated the East Coast.
- Wildfires in California and Colorado have caused billions in damages.
With increased risks, insurance companies are raising premiums to balance out losses.
2. The Insurance Industry Has Been Losing Money
For years, the property and casualty insurance industry has been running at a loss. Companies are now adjusting rates to stay financially stable.
3. Inflation Is Driving Up Repair and Replacement Costs
- Car parts, building materials, and labor are more expensive.
- Auto repairs and home renovations cost significantly more than they did just a few years ago.
As George Kamel puts it, “It’s like when the price of wheat skyrockets, and your local bakery has to charge more for bread. Same goes for insurance—the cost to insure people has risen, and the industry is trying to balance out those losses.”
4. Supply Chain Disruptions Are Still Affecting Insurance Costs
- Fewer new cars being produced means higher values for used cars, leading to higher auto insurance costs.
- Labor shortages and material delays have made home repairs more expensive, pushing up home insurance premiums.
Why Is Car Insurance So Expensive?
Both personal and market factors are driving up auto insurance rates.
Personal Factors That Affect Your Auto Insurance Premiums
- Age and Gender – Drivers under 25 and over 75 typically pay higher rates.
- Location – Living in a big city or high-crime area means higher premiums.
- Credit Score – A low credit score can increase your rates.
- Driving Record – Tickets, DUIs, and accidents lead to higher premiums.
Example:
Sarah, a 22-year-old college student in Portland with two speeding tickets, pays significantly more for car insurance than Emily, a 30-year-old in rural Utah with a clean driving record.
Market Factors Increasing Auto Insurance Rates
- More Reckless Driving = More Accidents – Since 2020, accidents have increased, leading to more insurance claims.
- Car Prices Have Risen – With fewer new cars available, used car values have soared, making replacement costs higher for insurers.
Why Is Home Insurance So Expensive?
Key Reasons Home Insurance Rates Have Increased
- Severe Weather Events – More hurricanes, wildfires, and floods mean higher claims and rising premiums.
- Supply Chain Issues – Labor shortages and material costs have made home repairs significantly more expensive.
- Location Matters – Homes in disaster-prone areas face higher insurance rates.
Example:
Mike and Lisa recently moved to Colorado and saw their home insurance rates spike due to the high risk of hail damage in the area.
How to Lower Your Home and Auto Insurance Costs
While insurance rates are rising, there are still ways to save money. Here are Dave Ramsey and George Kamel’s top tips.
1. Raise Your Deductible
- If you have an emergency fund, consider raising your deductible.
- A higher deductible means lower monthly premiums.
Example:
John raised his car insurance deductible from $500 to $1,000 and saved $300 per year on premiums.
2. Eliminate Unnecessary Coverage
- Review your policy and drop coverage you don’t need.
- If your car is paid off, you may not need comprehensive or collision coverage.
Example:
Mary removed rental car reimbursement and roadside assistance from her policy, saving $150 per year.
Pro Tip:
Using third-party roadside assistance (like Good Sam Club) instead of filing claims through your auto insurance can prevent premium increases.
3. Take Advantage of Discounts
Many insurers offer:
- Safe driver discounts
- Good student discounts
- Home security and anti-theft device discounts
4. Bundle Your Home and Auto Insurance
- Bundling can save 10-25% on your premiums.
Example:
Tom and Rachel bundled their home and auto policies and saved $840 per year.
5. Compare Quotes and Shop Around
- Many people overpay simply because they haven’t compared rates.
- Shopping around every 6-12 months can help you find better coverage at a lower cost.
Example:
Samantha hadn’t shopped for car insurance in five years. After switching providers through Trailstone Insurance Group, she saved $1,300 per year.
Why Does Dave Ramsey Recommend Trailstone Insurance Group?
Trailstone Insurance Group is a Ramsey Trusted Pro and works with over 40 top-rated insurance companies to help you find the best rates.
✅ We shop for you to find the best price and coverage.
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If you’re tired of high insurance premiums, let us help.
Final Thoughts
While insurance rates are rising, you’re not powerless. By adjusting your coverage, increasing your deductible, bundling policies, and shopping around, you can fight back against rising costs.
Dave Ramsey says, “Live like no one else now, so you can live like no one else later.”
By making smart insurance decisions today, you can save money, reduce debt, and invest in your financial future.
Need help lowering your insurance costs? Contact Trailstone Insurance Group today.
Stay smart, stay insured, and stay ahead of rising costs.