Increasing auto insurance premiums have been troubling for policyholders and their wallets. According to statistics released in May 2023 by the U.S. Department of Labor, auto insurance premiums increased 17.1% in the previous 12 months. Although the cost of insurance may change each year for various reasons, this infographic can help shed light on current market factors influencing policies across the country right now:
Vehicle inventory—While the availability of new cars has rebounded since the COVID-19 pandemic, inventory levels overall are still below average, and prices for used vehicles remain relatively high. As cars remain more costly, insuring them may be more expensive.
Higher repair costs—Inflation, supply chain issues lingering from the pandemic, high demand at auto shops and a car technician labor shortage have contributed to increased repair costs and the related price of auto insurance claims.
Rising medical bills—As health care costs have risen, auto insurance companies must pay more for medical services from MedPay and personal injury protection (PIP) coverage. Consequently, premiums have also increased.
Increased claims—Car accidents and thefts have become more common in recent years, leading to more claims being filed against auto policies. As the number of claims rises, so too does the cost of insuring against them.
In response to rising auto insurance premiums, policyholders should consider the following ways to save on their rates:
Stay safe – Avoid blemishes on your driving record by practicing safe habits behind the wheel.
Take courses – Completing driving safety courses may unlock discounted premiums.
Bundle coverage – Purchasing multiple types of coverage from the same insurer may reduce overall costs.
Maintain good credit – High credit card balances, late payments and other negative effects on a policyholder’s credit score may lead to higher premiums.
Reconsider policy details – Adjusting your coverage, such as increasing your deductible, may help limit premiums.
Drive less – Insurers may consider how far a policyholder drives annually. By reducing mileage and reporting accordingly, costs may be decreased.
Even among increased rates, auto insurance remains a critical loss control measure for U.S. motorists. Insufficient coverage could lead to legal noncompliance penalties and, in the event of an accident, catastrophic out-of-pocket costs.
Contact us today to learn more about potential auto insurance discounts and other ways to save on your premiums.
http://www.clearyinsurance.com/wp-content/uploads/Cleary_Logo.jpg00Carol LaCombehttp://www.clearyinsurance.com/wp-content/uploads/Cleary_Logo.jpgCarol LaCombe2024-07-18 14:12:232024-07-18 14:12:25Why Are Auto Insurance Rates Rising?
The commercial property insurance market continues to be challenging, with several factors contributing to premium increases for commercial property coverage:
1. Catastrophe losses
Hurricanes, floods, wildfires, tornadoes, and winter storms are occurring more frequently and with greater severity, causing annual insured losses of more than $100 billion globally in the last four years. In 2023, global insured losses totaled $118 billion, with severe convective storms (SCS) accounting for 58% of the losses globally, and six of the 10 most expensive events in the U.S. being SCS events.
2. Reinsurance
While reinsurance capacity has improved, the cost of available reinsurance capacity remains high due to the impact of catastrophic events, increasing cost of capital, financial market volatility, and inflation. These costs are passed along to customers.
3. Underinsurance
Due to increased material and labor costs, insured property replacement values continue to lag. Only 43% of business owners have increased their policy limits to accurately reflect what it would take to replace insured property.
4. Property Replacement Costs
Nonresidential construction costs have increased by 37% over the past four years, with a 65% increase in fabricated structural steel and a 37% increase in the price of concrete products. Additionally, machinery and equipment costs have increased by 22% over the same period.
5. Skilled Labor Shortage
Wages and salaries, comprising nearly half of construction costs, have increased by 22% over the past four years. However, 77% of contractors are struggling to find skilled labor. These factors may lead to higher rebuilding costs and longer delays, potentially triggering an increase in business interruption losses.
6. Property Rate Needed
Due to escalating loss trends, carriers are expected to raise rates again this year to close the gap between loss trends and rate increases.
In summary, the commercial property insurance market is facing significant challenges, leading to premium increases for commercial property coverage. The increasing frequency and severity of catastrophic events, along with high reinsurance costs and underinsurance due to rising material and labor costs, are key contributing factors. As a result, property replacement costs have surged, and there is a shortage of skilled labor, which may lead to higher rebuilding costs and longer delays. Carriers are expected to raise rates further this year to address the widening gap between loss trends and rate increases.
Summer brings longer days and plenty of sunshine, but with it comes the challenge of staying cool amidst soaring temperatures. The sweltering summer heat can lead to various heat-related illnesses, some of which can be serious if not addressed promptly. This article explores common heat-related illnesses and offers tips for preventing them.
Heat Syncope
Heat syncope is when someone suddenly faints due to being in a hot environment, especially after standing for a long time or getting up quickly from a sitting or lying down position. Heat syncope occurs as the body tries to cool itself down by widening blood vessels, which, in turn, can cause blood pressure to drop. This can make it hard for enough blood to reach the brain, leading to fainting. Usually, lying down and elevating the legs can help individuals recover quickly. If someone is about to faint from heat syncope, they might feel or exhibit the following symptoms:
Dizziness
Lightheadedness
Nausea
Blurry vision
Rapid heart rate
Sweating
Those not used to the summer heat, older adults, people with heart conditions and those taking medications that affect blood pressure have a higher risk of heat syncope. To prevent heat syncope, drink plenty of water, wear light, loose-fitting clothes, and take regular breaks in cool or shaded areas. Additionally, avoid getting up too quickly from a sitting or lying position to keep your blood pressure steady.
Heat Rash
Heat rash occurs when sweat ducts become blocked and trap sweat beneath the skin. Common in hot, humid environments, it often affects areas where skin folds or where clothing creates friction. Symptoms of heat rash include the following:
Small, red bumps on the skin
Itchy or prickly sensations
Slight swelling
Excessive sweating, tight clothing and prolonged periods of physical activity during summer heat can increase your risk of developing heat rash. You can avoid it by wearing loose-fitting clothes with breathable fabrics, such as cotton or linen. Also, refrain from using thick lotions or creams that may clog your pores, and use fragrance-free soaps that won’t dry or irritate your skin.
Heat Cramps
When you sweat excessively due to heat or physical activity, it can cause an imbalance in electrolytes, which can lead to muscle cramps or spasms. Although heat cramps aren’t typically serious, they are a sign the body is struggling to cope with the heat and that further measures should be taken to prevent more severe heat illnesses from occurring. You might have heat cramps if you’re experiencing:
Tight muscles with mild to severe pain
Stiff or curled toes
Flushed or moist skin
Heat cramps are common for those who work outdoors. Notably, even if you’re mostly indoors for work, your risk of developing heat cramps increases if you have preexisting conditions, are on a low-sodium diet or are taking certain medications (e.g., blood pressure pills, diuretics or antidepressants). If you start feeling heat cramp symptoms, immediately stop any activity and get out of the heat, if possible. Stretch and massage the cramping muscle and apply a cold compress. You may also drink milk, coconut water, sports drinks or an oral rehydration solution to replenish your body’s lost electrolytes.
Heat Exhaustion
Heat exhaustion is a serious condition that occurs when the body loses an excessive amount of water and salt through sweating. Without intervention, heat exhaustion can escalate to heatstroke. The symptoms of heat exhaustion can appear suddenly without warning or develop gradually over time. They include the following:
Pale, moist skin
Weakness
Dizziness
Nausea
Headache
Muscle cramps
Fever of 100 F or higher
You are more likely to experience heat exhaustion if you engage in strenuous physical activity in hot, humid environments. People not acclimated to high temperatures (such as those living in cooler climates who suddenly encounter hot weather) are also at higher risk. In general, the elderly, young children and individuals with chronic health conditions like heart disease or diabetes are the most susceptible to heat exhaustion. If someone is experiencing heat exhaustion, move them to a cool place and remove unnecessary clothing like jackets or socks. Offer them cool water to replenish fluids, then use a spray bottle or damp cloth to apply cool water to their skin. Fanning them and placing cold packs on their neck can also help.
Heatstroke
Heat exhaustion, if not treated, can lead to life-threatening heatstroke. Heatstroke happens when the body’s temperature regulation fails and body temperature rises to 104 F or higher. A person experiencing this medical emergency may also exhibit the following symptoms:
Disorientation or confusion
Loss of consciousness
Hot and dry skin
Rapid pulse
Heatstroke requires immediate medical attention to prevent permanent damage or death. If you see someone possibly suffering from heatstroke, call 911. Until help arrives, remove excess clothing and drench the skin with cool water. Place ice on the neck, armpits and groin to help cool the body down. If the person is alert, give them cool fluids to drink.
Summary
Summer heat can be more than uncomfortable; it can threaten your health. When left untreated, heat-related illnesses can become life-threatening. If heat-related symptoms don’t improve within an hour, contact a doctor, and seek immediate medical attention if the person has heatstroke.
An early retirement is a celebratory event when it happens according to your timeline. But it can also be a financial wrecking ball when you’re forced to retire prematurely — something many Americans experienced during the COVID-19 pandemic.
Indeed, more than 3 million additional workers in the U.S. retired during the pandemic than is typical, according to a Federal Reserve Bank of Saint Louis analysis, which found “a significant number of people who had not planned to retire in 2020 may have retired anyway because of the dangers to their health or due to rising asset values that made retirement feasible.”1
But it’s not just a global health crisis that can induce an early retirement. Injury and illness are among the most common reasons that cause a forced retirement. Some on the cusp of retirement lose their jobs and choose to sit it out for good when their employer downsizes or their skill set becomes obsolete. And others stop working before they intended to care for an ailing loved one.
Indeed, those who are forced into early retirement early need to consider the following potential financial risks:
Longevity risk
Health insurance coverage
Inflation
Sequence of returns risk
Taking steps to manage these risks as early as possible is a must. For guidance, many turn to a financial professional.
Longevity risk after a forced retirement
Those who stop working before their normal retirement age are far more vulnerable to longevity risk — the likelihood of outliving their assets — because they must stretch their savings out over a greater number of years. They also have fewer working years to contribute to tax-deferred retirement accounts, so they start off with less in the bank.
As a general rule of thumb, financial professionals often recommend a 3 percent or 4 percent withdrawal rate during the first year of retirement. Retirees can then adjust that amount higher annually to keep pace with inflation. Assuming their investment portfolio earns more than 4 percent on average per year, that withdrawal rate ensures that they will only ever spend their earnings and leave their principal untouched.
Early retirees, who need their savings to last longer, may need to learn to live on less. They may also need to reduce their expenses by downsizing to a cheaper house or simply return to work (even part time) for a few extra years to bolster their retirement nest egg.
Those who have the means can also potentially delay claiming Social Security benefits a few extra years to permanently increase the size of their future Social Security checks — the best way to give yourself a raise during retirement.
Health insurance coverage after a forced retirement
Many early retirees underestimate the potential cost of paying for private health insurance during the years before they become eligible for Medicare, the federal health insurance program covering those age 65 and older, certain younger people with disabilities, and those with end-stage renal disease.
Premiums for private health insurance, even for a few years, can consume an oversized portion of your savings, which could undermine your ability to make ends meet throughout retirement.
Options for coverage include COBRA, a spouse’s insurance, retiree health insurance benefits, the public marketplace, private health insurance, membership-based group health plans, and Medicaid for those with demonstrated financial need.
Long-term care (LTC) insurance coverage, which picks up where Medicare leaves off, can potentially curb future costs related to assisted living and nursing home care. Some hybrid life insurance policies include LTC coverage.
Before buying an LTC insurance policy, retirees should speak with a financial professional to determine whether such coverage is the right fit for their family.
Inflation
The rising cost of goods and services, otherwise known as inflation, is enemy number one for retirees.
When you no longer produce an income, any increase in consumer prices erodes your purchasing power. And the more years you spend in retirement, the bigger that threat becomes.
Historically speaking, inflation rises from 1 percent to 3 percent per year. Assuming 3 percent annual inflation rate, a 55-year-old making $50,000 per year who retires today would need the equivalent of about $91,000 by age 85 to maintain the same standard of living.
Inflation, of course, doesn’t always remain within the federal government’s target range. In early 2022, the Consumer Price Index soared to 7.5 percent, the biggest spike in consumer prices since 1982.
Retirees typically scale back their level of investment risk because they depend on their retirement savings for income and can’t afford a period of prolonged losses. While that may be age appropriate, it is also a risk to become too conservative with their asset allocation.
Sequence of returns risk
New retirees, regardless of when they leave the workforce, must also be mindful of market performance.
Those who retire into a bear market, or experience losses or low returns in the early years of their retirement, are statistically far more likely to outlive their savings than retirees who experience losses later on.
Indeed, while permanent life insurance policies are primarily designed to provide a death benefit to protect the ones you love, they also build cash value as premiums get paid – and you can borrow from your cash value for any purpose.
For example, retirees can use their cash value to pay the bills when the market is down, giving their investment portfolio time to recover.
Another way to offset sequence of returns risk is to create a traditional emergency fund worth at least 12 months of living expenses in a liquid account, such as a savings or money market account, from which retirees can draw an income during periods of market downturns.
Conclusion
It’s one thing to plan for an early retirement, but quite another to be forced out of the workforce prematurely. With careful planning, professional guidance, and tools to mitigate multiple risk factors, however, it may still be possible for early retirees to live the lifestyle they had envisioned.
Provided by Matthew Clayson, courtesy of Massachusetts Mutual Life Insurance Company (MassMutual). CA Insurance License # 0I01304
http://www.clearyinsurance.com/wp-content/uploads/Cleary_Logo.jpg00Carol LaCombehttp://www.clearyinsurance.com/wp-content/uploads/Cleary_Logo.jpgCarol LaCombe2024-07-18 13:59:572024-07-18 14:00:00Mitigating the Financial Risks of a Forced Retirement
