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TS Peck

Why Are My Liberty Mutual Insurance Rates Increasing?


April 16, 2020

Why Are My Liberty Mutual Insurance Rates Increasing?

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Why Are My Liberty Mutual Insurance Rates Increasing?

A consistent spike in your insurance premiums is never wanted, and especially not when other living expenses are increasing. Many Liberty Mutual policyholders have recently seen an uptick in their insurance rates due to factors outside their control. The reason for broad increases in Liberty Mutual's rates can is largely found in the company's Q1 earnings, which generally did not go well.

Why is Liberty Mutual Increasing Many Policyholders' Insurance Rates?

Major Disasters Created Large Losses

In the first quarter of this year, Liberty Mutual reported a substantial net loss of $74 million. That's not just a substantial loss, but is more than a half-billion less than last year's Q1 positive earnings of $498 million. 

This loss largely stemmed from multiple severe weather events, which led to catastrophe losses of $1.2 billion for Q1 2023. That was over a half-billion more than Q1 2022's catastrophe losses of $656 million. 

Obviously, large losses are not what the company, its leadership or its investors want. In response to these losses, the company has increased premium rates by an average of 12.8% when customers have renewed personal lines over the past year. 

Even though the disasters didn't necessarily occur in Vermont, almost all of Liberty Mutual's policyholders are feeling the pain regardless of where they live.

Rates Rising More Than Inflation

A 12.8% increase in premiums is no small amount, especially considering many Vermont residents spend multiple thousands on insurance each year. 

For example, a $1,000 annual car insurance premium could've jumped $128 per year. A combination of car and home insurance premiums that totaled $3,000 annually would now be $3,384, with just the company's average premium increases over the past year.

Moreover, some policyholders may have seen rate increases that are much higher than the company's average across all personal policies. The 12.8% is higher than nationwide inflation reached at any point in the last year, and it's come at a time when many people are managing rising costs across almost all budget categories.

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Check Your Options: The Role of Independent Insurance Agencies

While rate hikes are not uncommon in the insurance industry, the ones that Liberty Mutual has recently instituted are atypical. They're certainly much higher than what some other insurance companies have done in the last year.

If you're a Liberty Mutual policyholder and faced with a jump in your insurance rates, the best course of action is to compare rates from other insurance companies. Liberty Mutual isn't the only insurer, and they may no longer be the best option for you.

To compare rates, find an independent insurance agent who specializes in personal lines. It's important to work with an independent agent, as they're able to compare rates from multiple insurance companies. They can check your rates against what other insurers are offering easily.

If you bring your declarations page (or just all of the paperwork) for each policy, an agent can use this to check what coverages, deductibles, limits, etc. you currently have. They can then request quotes from other companies that meet or exceed your current protections, and show you how much other insurers would charge.

Should you find another policy option that's more affordable and still meets your coverage needs (and you very well could), it's easy to switch insurers when working with an agent. They'll help you through the process.

Get Help Checking Other Insurers' Policies

To speak with an independent insurance agent who's in Vermont, contact the independent insurance agents at T.S. Peck Insurance. Our agents can help you compare personal policies' coverages and premiums, and we'll make sure you find a solution that's affordable while also keeping you well protected.

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