Why Are My State Farm Insurance Rates Increasing?

Inflation has increased the cost of almost everything, and insurance is no exception. You’ve undoubtedly seen this if you’re with State Farm, and will likely see another premium increase the next time your policy renews. While there are many factors behind the premium increases, policyholders don’t have to passively accept the new rates. Shopping around could net you substantial savings.

TSP Farm

Why is State Farm increasing insurance rates?

State Farm is far from the only insurance carrier to raise rates, and the rate hikes in Vermont honestly aren’t as high as in other states.

Auto Insurance Rates Increasing

After a 9.2% average increase in auto insurance premiums last year, State Farm has raised its auto rates by an average of 13.9% this year. These figures are nationwide, and insurance companies have generally increased rates less in Vermont than other states.

An average ~25% increase in two years is going to be noticed by virtually all drivers. Even those with below-average rate increases could be paying hundreds more for auto insurance now.

Home Insurance Rates Increasing

State Farm’s increases in home insurance premiums aren’t as much as auto insurance, but the same trends appear. The company raised home insurance rates by an average of 2.5% in 2022, and has put in rate increases averaging 6.3% in 2023.

Again, these increases aren’t as severe as some other companies (USAA 18.6%, Liberty Mutual 21.3% and Farmers 30.1% over two years). Still, a two-year 8.9% increase on a homeowners policy can still result in paying $100+ more each year.

Multiple Reasons Are Given for the Rate Increases

In general, insurance companies are raising rates because of increased claims payouts. State Farm sustained a record-breaking $13.2 in underwriting losses (many for auto claims) in 2022.

The losses — and associated premium increases — are largely attributed to a few factors:

  • Inflation continues to be higher than normal
  • Labor and parts costs have gone up for repairs
  • Healthcare costs have gone up
  • More auto insurance claims (as people drive more)

Healthcare costs can have a dramatic effect on payouts of some personal injury protection (auto), bodily injury liability (auto) and general liability (home) claims. Severe injuries can require ongoing and specialized medical care that’s only become more expensive.

TSP Farm

Independent Agents Can Help Check Policy Options

State Farm’s insurance rates are substantial, and the company didn’t necessarily have the lowest rates to start with. If you’re a State Farm customer and are paying more for insurance, one of the best things you can do is to compare policies with an independent insurance agent.

Independent insurance agents are able to compare policy options from many different insurance companies, which is something State Farm’s agents usually can’t do. State Farm tends to use exclusive (or captive) agents, who are often restricted to only the company’s policies. A State Farm agent can help you compare policies from that company — but an independent insurance agent can help you compare policies from some of the most competitive insurers in Vermont.

Checking rates with an independent agent is a simple process. Bring in your State Farm policy (namely the first few pages of it), and an agent can review the coverages and rates. They can then check whether other insurers are able to undercut the rates you’re currently paying, without sacrificing important coverages that you need.

An independent agent can also assist with adjusting coverage should you want to. At the very least, however, they’ll be able to check whether you’re currently paying the lowest rates for the coverages, deductibles and limits you have.

Get Help Checking What’s Available

If you’d like to speak with an independent insurance agent, contact us at T.S. Peck Insurance. Our Vermont agents are fully independent, and they’ll make sure you find the best policy at the most competitive rates regardless of what company offers it.