If you recently received your 2019 home and auto insurance renewal rates you've probably felt at least a little like the man pictured above. My homeowners insurance rate increased 18% year-over-year while my auto insurance rate jumped 24%. YIKES!!! Wondering if I should be seeking justice (or retribution?) I got in touch with local insurance guru Steve Hakes, of Rocky Mountain Insurance Center, for an explanation. Steve summed it up in one word: "Hail." While the average Colorado summer sees about 1/2 dozen major hail events, 2018 produced a jaw dropping 22 "catastrophic" events. These hailstorms have kept both roofers and auto body shops filing insurance claim after insurance claim after insurance claim. And while hail was far and away the main culprit, Steve also mentioned some additional minor factors. He shared that with the good economy more drivers are purchasing new vehicles. Thus, if an accident does occur, the replacement costs are higher than hitting an old jalopy. Furthermore, many of the new safety features auto manufactures have been implementing like adaptive headlights and distance sensors are adding thousands to repair bills when a claim is filed. These new parts didn't even exist five or ten years ago. Indeed, the front bumper of a Honda Accord now has nearly double the parts it had twenty years ago. Finally, Steve noted insurance companies have been publishing reports stating amounts awarded in bodily injury claims are up by about 1/3 in the last ten years largely thanks to the increasing cost of healthcare. All in all, it's not a promising story. And while the best thing that can happen for Colorado residents right now is a summer without hail, that alone won't solve all our insurance bill woes. Steve said to plan on insurance rates staying high for awhile. That said, before running off to save money by downgrading your insurance, let's remember a few things. First, insurance exists to mitigate the effects of a low probability, high loss event. Premiums are set based upon the idea of "pooling," or the creation of a large group of "like insureds." That means even if you don't file an insurance claim, your rate is impacted, for better or worse, by people sharing similar characteristics to you (things like age, geographic location, credit score, etc.) Understand that you should buy as much insurance as you need, NOT as much insurance as a particular, arbitrary dollar amount will get you (like some insurance company commercials like to advertise!) Also remember that insurance rates are submitted every year to the state insurance commission and either approved or denied. With all this in mind, it's always a good idea to periodically (every two or three years) "shop" your insurance. I've always recommended using an independent broker to do this. Insurance is a competitive marketplace and independent brokers like Steve will compare the rates from about a dozen reputable companies to find you the best deal, saving you time and money, and at no additional cost beyond that which you would have paid had you called them yourself. In the end, a rising insurance bill is probably similar to death and taxes - inevitable. Minor factors such as regular renewal increases (due to inflation) coupled with more expensive repairs, higher healthcare costs, and more people moving to the Front Range have kept our region's insurance rates on the incline. Last year saw insurance companies take extraordinary heavy losses in Colorado due to hail and now they're resetting their rates accordingly.