How Inflation and Rising Prices Affect Key Industries

Inflation is an increasing issue as 2022 rages on, with gas and insurance being two of the industries that have taken the hardest hit and seen the most change as a result of rising prices. Higher gas prices are increasing insurance premiums, as most car insurance premiums in the United states have increased from 5% to 15% as of April 2022, which equates to $1,655 per year and $138 per month. In addition, some of the most popular auto insurers are filing for rate increases as of this year, with State Farm looking for a 4.2% rate increase, and Allstate for a 12% rate increase. There are many reasons for insurance rate increases, many of which are present and relevant in 2022: Higher fuel theft, labor shortage, increased gasoline prices, supply chain disruption, rising medical costs, and increased car prices.

Gas prices alone are also rising, as we saw an increase from $1.07 per gallon in 1993 to $4.29 in March of 2022. That number was a 39.7% increase since 2022, which is a result of a number of factors, such as Covid-19, inflation, labor shortages, supply chain confusion, and the Russia and Ukraine conflict. Many Americans report feeling worried about gas price inflation, and nearly half state that rising fuel prices are their largest concern of 2022. Because insurance has proven to be so heavily affected by gas price increase, there are many methods that consumers use to balance their finances, but at what cost?

Some people try to switch to cheaper fuel, however, this may cause damage to their vehicle, including powertrain damage, damaged transmission, and engine failure. Others make attempts to forgo insurance despite car insurance being mandatory in 48 states. Finally, some consumers have tried to make the switch to hybrid or electric cars. While this decision seems viable, purchasing an electric vehicle can be much more difficult than usual when in the midst of a supply chain shortage.

Fortunately, there are methods by which consumers can maximize their gas mileage without damaging their vehicles. The first and most simple method is to drive less, which many reveal they are already doing. Studies show that 43% of Americans are driving less, and 80% report that they will limit driving even more if gas prices reach $5 per gallon. Aside from driving less, driving behaviors that increase fuel use are sudden breaking, prolonged idling, and speeding. Refraining from and cutting back on these driving habits are just a few ways that fuel minimizing can be sustained.

On top of smart fuel usage, studies report key methods for protecting car insurance rates from being affected by the changing gas prices. The first being driving less, as well as taking advantage of offered discounts such as safe driving discounts and taking a defensive driving course, and comparing car insurance quotes to ensure that one is receiving the best deal. Although 2022 has proven to be another tough year financially, gas prices and insurance do not have to break the bank if one exercises smart and efficient methods of saving money.

How Inflation and Rising Prices Affect Key Industries

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