Why Insurance Premiums Are Higher in 2025 & What You Can Do About It

If you’ve noticed your insurance premiums creeping upward in 2025, you’re not alone. Things like economic shifts, rising claim costs and evolving risk factors have all contributed to increased insurance rates across the industry, which can be understandably frustrating for policyholders. Understanding why insurance premiums are higher in 2025 as well as what you can do about it can help you make informed decisions to mitigate their impact. Here at Glover Family Independent Insurance, we want to make sure you’re armed with the right information to help you find the best coverage at the most reasonable rates, so let’s dive into why it’s happening and what you can do about it!

There are several key factors that are contributing to the higher insurance rates this year, so let’s dive right into them to give you a better understanding of why things have gotten to this point.

1. Inflation & Rising Repair Costs
   • Regardless of industry, the cost of almost everything across the country – in particular things like home maintenance, medical services and vehicle repairs – has surged due to inflation and supply chain disruptions. Thanks to the higher cost of vehicle repairs as well as replacement costs, which are factored into insurers’ pricing models, we now have much higher premiums.
2. Increased Claim Frequency & Severity
   • Extreme weather events and natural disasters have been running rampant throughout the country, as has an uptick in accidents and medical claims. These things combined have led to 2025 already being one of the costliest years for insurance payouts, which forces insurers to adjust their rates to account for the increased risk and financial impact we’re facing.
3. Advanced Technology in Vehicles
   • While the sheer amount of advanced technology found in modern vehicles is phenomenal for the day to day, these high-tech safety features and complex systems require significantly more expensive repairs if and when they do need them. The tradeoff for enhanced driver and passenger safety is the higher cost of repairing electronic components like sensors and cameras, which in turn contributes to higher auto insurance rates.
4. Cyber & Fraud Risks in Home & Business Insurance
   • Unfortunately the bad apples have been at work throughout the country as well, as we’ve seen a significant rise in things like cyber threats, insurance fraud and security breaches as well. All of these things also prompt insurers to increase premiums for home and business policies when they include digital protection, as the additional costs of these more sophisticated detection systems are passed on to policyholders.
5. Regulatory & Industry Adjustments
   • Lastly, new laws and regulations may require insurers to adjust policies to meet updated guidelines. This can potentially lead to higher operational costs and, in turn, impact premium rates.

All of these reasons for increased premium prices are rather unavoidable, so you might understandably be pulling out your hair to figure out how to combat them. We’re here to tell you that there are a few steps you can take to optimize your insurance coverage and reduce costs as much as possible.

1. Bundle Your Policies; plenty of insurers will offer discounts by bundling various types of insurance policies together, which lowers your overall costs while also simplifying policy management.
2. Increase Your Deductible; if you’re finding the monthly cost to be too high, but think you can comfortably manage the out-of-pocket expenses associated with a higher deductible in the event you need to file a claim, this is a great way to lower your premium.
3. Improve Your Credit Score; credit history is often factored into the pricing models of insurance companies, so if you can find ways to achieve and maintain a good credit score you might find yourself qualifying for lower rates.
4. Ask About Discounts; a lot of providers offer all kinds of discounts, such as for good driving history or installing a home security system, which will obviously reduce your premiums.
5. Shop Around for Better Rates; although you’ve likely grown comfortable with your current provider, if you find that your rates have gotten too high it can’t hurt to search around for better rates elsewhere.
6. Maintain Safe Driving & Home Security Practices; the best way to keep your insurance costs as low as possible is to reduce your risk profile as much as you can — which means maintaining a clean driving record, updating home security systems and avoiding frequent claims.

Hopefully, this information has helped you understand the situation we’re all currently facing, and perhaps given you some ideas on how to combat the rising prices. If you’d like to discuss a new policy we’d be happy to chat, just give us a call right here at Glover Family Independent Insurance!