The why and how behind your insurance price

If you’re reading this, you’re probably wondering why insurance rates are going up right now—across nearly all carriers. And for that matter, what can you do about it? They’re important questions right now.

To find those answers, it’s important to first understand the basics of how insurance functions. When you buy insurance, you buy a promise—if something financially devastating happens to your home or your car, the money you (and the other customers of your carrier) paid toward insurance premiums will be enough to get things back on track.

At Branch specifically, we operate a reciprocal exchange—a modern day insurance cooperative. What that means is the premiums we collect aren’t our money. They’re our members’ money. Branch just manages the funds to make sure our member community operates in its own best interests—including yours. So we spend time assessing risk and doing the math so we can meet our goals:

  • Be as efficient as possible to keep our cost of doing business low, so we can pass savings along to our members. 
  • Set prices as fairly as possible so that the total cash paid into the membership by all members is enough to cover the claims of any unfortunate members in their times of need. 

So, why are prices going up?

Just like other industries, the insurance industry has been heavily impacted by the persistence of inflation. With high inflation, the cost of claims has been at its highest in two decades. Not to mention, the start of 2023 was the worst quarter on record in terms of number of catastrophic weather events. Given these factors, it’s no surprise it’s costing significantly more to cover a claim. Even veteran carriers have been increasing premiums and slashing advertising budgets while still experiencing unprofitability—sometimes for the first time in a hundred years. 

So as Branch continues to prioritize setting the most accurate premiums in order to take care of our members and account for risks, rates unfortunately have to increase. The good news is that this ensures our members will be well taken care of in the moments they need it most.

How is Branch any different?

Branch prices are built to be structurally lower, even when rates go up. While we’re not immune from the complicated economics of insurance, we built Branch to make insurance simpler and more affordable and, above all, a force for good.

For our members, that means you can trust us for a few things:

  • We’ll always look for ways to make Branch more efficient and lower premiums. Our priority is to lower the cost of insurance for our members.
  • Your premiums will go toward the good of the Branch community, not excessive advertising or a bloated bottom line.
  • We’ll have your back when you need it most.

As we all work through these turbulent times and rising costs, know that Branch’s mission is to make insurance as affordable as possible.