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Rising costs for car and homeowners insurance have three key components:
1. Investment gains for insurers are less certain, so they’re reaching for underwriting profits in place of investment gains on both car and house insurance.
2. Car repairs cost more because (a) cars and car parts are more expensive and (b) labor costs are higher. So insurance companies have to cover higher repair bills.
3. House values and construction costs are both way up over the past 3-4 years, so insurance-paid repairs are up considerably too, and again, insurers have to cover higher repair bills.
A thinking person will realize that none of these things are Joe Biden’s fault. In fact, higher construction costs started with Donald Trump’s 2017 tariffs on Canadian softwood (framing lumber) imports. And higher auto parts and car costs? Trump’s 2018 steel and aluminum tariffs. Studies have found that Trump’s tariffs reduced real income in the United States, as well as adversely affecting U.S. GDP; one study said Trump’s tariffs were equivalent to one of the largest tax increases in the U.S. in decades. And then the pandemic simply magnified these effects.
Let’s give credit where it’s due.
Inflation is a win-win-win for the federal government, no matter which party is in power.
It gets money when it prints it. Win 1.
It gets more money when we have to pay more taxes because we made more. Win 2.
It gets even more money when we sell something years later, capital gain. Win 3. A winner that keeps on giving money to “our” Representatives to spend on their favorite things.
Heads government wins; tails, workers lose.
And all because it prints the money!