Insurance premiums are rising, even as inflation cools. Here’s why.

Maybe you’ve noticed your insurance bills go up and up and up. It’s not just you.

Car insurance has jumped nearly 13% since last year, according to the most recent consumer price index. Health insurance climbed almost 6%. Household and tenant insurance crept up 2%.

One thing is making all of it worse: inflation. It’s cooler than its pandemic peak of 9%, but it rose slightly in November to 2.7%.

“Parts and labor for car repairs are more expensive. Construction materials and labor for home repairs are more expensive, along with most other goods and services in the economy,” said Stephen Shore, who teaches insurance and risk management at Georgia State University.

Inflation has cooled down, so Shore said some customers may be surprised that insurance rates haven’t done the same.

“That’s because insurers are playing catch-up,” he said. Insurers have to show state regulators that their costs have gone up before they’re allowed to raise prices.

One big area where prices have increased noticeably is health insurance. It comes along with the rising wages of health care providers.

“As health care costs go up, to see a doctor, to get prescription drugs … that drives the health insurance premiums,” said David Marlett, a professor of insurance at Appalachian State University.

Another sector feeling the pinch of inflation is car insurance.

“Part of the problem is some of the minor accidents end up escalating in cost pretty significantly,” said Rob Hoyt, a risk management and insurance professor at the University of Georgia.

Cars are more complex nowadays. A little fender bender isn’t just a matter of fixing a dented bumper and buffing some scratched paint. It might include fixing a broken rear-facing camera or motion sensor.

“There’s a whole lot of work that has to go on by the technicians to reset a lot of that technology after it’s been repaired,” Hoyt said. That can lead to longer repair times, more car rentals and higher labor costs.

Drivers are familiar with paying for liability insurance. But that’s not restricted to cars. It protects you if someone falls and breaks their arm on your slippery stairs.

Kimberly Lilley, chair of the California Legislative Action Committee’s insurance task force, said that in our litigious culture, victims may be less likely to let mistakes slide.

They’re “more likely to say, ‘I saw someone else make $200,000 off this kind of accident. I’m going to sue you and try and get that money too,'” she said.

As residents of California and Florida already know, home insurance costs are surging. Lilley said that’s because of climate change.

“The result of the planet warming up is that we have more severe hurricanes. We have more fires,” she said. “And we’re having a much larger loss than we ever used to have.”

And while a slowdown in general inflation might help the insurance industry to some extent, climate change, shifting social attitudes and fancier cars will keep pushing up premiums, Lilley said.

“They’re going to have to continue to charge more,” Lilley said. “That number is just going to be bigger, so plan for it.”