promoearn: The Daily Money: Why home and car insurance rates are about to jump

Monday, June 27, 2022

The Daily Money: Why home and car insurance rates are about to jump

ALL THE MONEY NEWS YOU NEED TO KNOW

Monday, June 27

Hello, Daily Money readers. It's Jayme Deerwester with you on this Monday.

Nearly half of us worldwide are still unhappy more than two years after the start of the COVID-19 pandemic, a new survey says. According to the Oracle Happiness Report released earlier this month, about 45% of people have not felt true happiness since early 2020.

Although vaccines have allowed a return to normal, most people still of us aren't feeling happier because the crisis still isn't over, explains Gretchen Rubin, the best-selling author of "The Happiness Project," and co-author of the report, tells USA TODAY.

"I don't know about you, but I've heard so many people say, 'Give me a date where I can pace myself and I can get to the finish line,'" Rubin says. "But, when we have this constant feeling that we don't know, that sense of uncertainty increases."

Home and auto insurance rates are set to jump in tandem

When consumers receive their homeowner and auto insurance renewal contracts this year, they're likely to find their rates have risen significantly. It's hard to pinpoint exactly how much rates will increase because they vary by location. But analysts generally estimate the average increase will range between high single-digit to low double-digit percentages.

A couple of things are combining to push homeowners' insurance rates higher, including the rise in extreme climate events over the past five years and inflation.

Also factoring into higher renewal rates is inflation that has soared to a 40-year high. During the pandemic, not only did the housing market boom, but shortages emerged of everything from lumber to oil (used for things like asphalt and roofing products) and even workers to build, repair, or remodel homes. All of that pushed up how much it would cost to rebuild a house in case of a disaster, a major factor in pricing homeowners' insurance.

Auto insurance rates are also getting a boost from higher costs. Not only did the price of used cars soar during the pandemic for various reasons including a limited number of new cars for sale and a strong preference for road trips while flying was restricted, but labor and parts prices also jumped because of shortages. Couple that with more accidents occurring as vehicle miles driven reverted back to pre-pandemic levels in spring, and you have a recipe for disaster.

Is inflation turning us into bad tippers?

Daniel Westwood has been bartending across Las Vegas for almost two decades through multiple recessions. But even during those tough times, customers tipped him adequately, he said.

The shift nowadays "100% has to do with inflation," he says. "I'm hearing customers all the time going: 'It's too expensive. We can't tip.'" One customer recently left a handful of coins as a tip on a $120 bill they racked up, he adds. Others look him dead in the eye as they hit "no tip" on the credit card processing machine.

Americans are feeling the pinch of inflation across just about every spending category as it hovers at a 40-year high. But that hasn't caused Americans to cut back on vacations or dining out, according to consumer spending data published by the Bureau of Economic Analysis.

Instead, many people who eat out, particularly in cities with high tourist volume, are increasingly leaving smaller tips, servers and bartenders told USA TODAY. That's making it even more difficult for those workers to cope with inflation.

🎵 Mood music 🎵

As someone who worked in the service industry in her younger years, I'm with Willie Sordill on the issue of tipping.

"Please tip your waitress, she's workin' hard for you. She'll walk a few miles more before she's through. She's got bills to pay, and food to buy like you."

About The Daily Money

Each weekday, The Daily Money delivers the best consumer news from USA TODAY. We break down financial news and provide the TLDR version: how decisions by the Federal Reserve, government and companies impact you. It even comes with its own Spotify playlist a listen. It features every song quoted here.

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