Here’s some news funeral home owners won’t want to hear. . .



It had not really occurred to me with everything else that is going on in our economy.  However, one of the expenses that is necessary for a funeral home with a fleet of automobiles, including expensive funeral coaches, is that expense category of insuring those four wheeled vehicles.


And, in this recent article from the folks at J.D. Power I learned that the rates for automobile insurance are soaring.  Here’s a quote from the article, “As inflation has affected all sectors of the economy, the costs of repairing and replacing damaged vehicles, medical costs and all other costs associated with an auto insurance claim have increased substantially. Consequently, auto insurance premiums have increased at an unprecedented rate during the past two years (7.9% in 2022, and another 5.9% in the first six months of 2023).”


United States
Automobile Insurarance

Further driving up the price increase is the added protection one should maintain for what is called their “Uninsured Motorist Coverage”.  According to the J.D. Power article, since premiums have been increasing an increasing number of American drivers are simply doing without insurance.  Here’s what the article says on that situation, “According to data collected by J.D. Power, the number of American households with at least one vehicle who say they do not have auto insurance has risen in the first half of 2023, up to 5.7% from 5.3% in the second half of 2022.”


The article points out that the increases in price will, more than likely, continue.  The article also points out that for the calendar year 2022 the automobile insurance industry in the United States paid out 12% more in claims than they collected in premiums.  Part of that is probably based on the fact that the United States inflation rate has risen so dramatically, so fast.  For instance, insurers were pricing and insuring vehicles, let’s say, with a $20,000 value that had a $22,000 value six months later.


That could lead to a situation where a totaled vehicle claim resulted in a higher value than the vehicle was ever priced out for insurance coverage at.


Generally, automobiles depreciate with time, but there have been times in the past couple of years — because of supply chain issues and inflation — that car values have increased.


In any regard, an interesting article and, unfortunately, an added expense funeral home owners and managers need to take into account when creating that 2024 budget.


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