A Worthwhile Expense: Insurance Costs Going Up With Everything Else, But That is No Reason to Take the Cheap Route

Costs are going up — and that includes insurance.

 

According to insurance resource The Zebra, car insurance rates in Arkansas have ballooned over the past decade, rising from an average annual premium of about $1,500 in 2016 to about $2,700 in 2026. Meanwhile, LendingTree reported that home insurance rates climbed a whopping 46.8 percent nationwide from 2020 to 2025.

 

“It’s a tough time for the American consumer,” said Andrew Meadors, mid-South regional co-director at Sunstar Insurance Group. “Gas, collision parts, construction materials — everything is going up, interest rates are going up, and so the cost of insurance is going up, too, all in step, in sync.”

 

 

With grocery bills and other expenses going through the roof, it might be tempting to cut corners when it comes to insurance. However, the right coverage is essential to protecting one’s assets in the event of sudden misfortune.

 

“Whether it’s a medical emergency or the unexpected loss of a loved one, the right coverage can keep a difficult situation from becoming a financial crisis,” said David Todd, chief operations officer and president of benefits at Sunstar. “Here in Arkansas, I see hardworking families focused on taking care of everyone else, but sometimes they forget to protect themselves. Insurance provides a financial safety net and peace of mind when life does not go according to plan.”

 

 

From automobiles to life, health and more, here is a look at the latest when it comes to insurance.

 

AUTO INSURANCE

 

These days, it is relatively easy to take out an auto insurance policy online without talking to a single person. However, Dennis Bost, a State Farm agent based in Little Rock, said working with a reputable agent who can tailor policies to one’s needs and budget can add value while preventing headaches come claim time.

 

 

By way of example, he noted that if an Arkansas driver carries the state minimum liability limits of $25,000 in property damage coverage and hits a vehicle worth $75,000, that driver could be responsible for paying the $50,000 difference on the claim — a financial catastrophe that could be avoided by shelling out a few more bucks a month for $100,000 in coverage.

 

“A lot of people look at insurance as a commodity, kind of like going and buying a candy bar or a car, and it’s really not that. Insurance doesn’t need to be a one-size-fits-all type of thing,” Bost said “It needs to be something that a professional sits down with you and tells you, ‘Yes, you need this. No, you don’t need that. This is worth spending money on. This is not.’”

 

As body shops have gotten more expensive, the severity of claims, meaning how much accidents cost, has increased, as well.

 

“It’s not like your grandma’s ‘87 Buick that had a big metal bumper, and if you hit something with it, it was $300 for a new one,” Bost said. “Now what we’re seeing is if a car goes in a body shop, you’re looking at at least $5,000 or $6,000, even if one quarter panel is damaged.”

 

Meadors said repairs are not only becoming costlier but lengthier.

 

“The collision parts are going up. The length of time vehicles are in the repair centers is going up, it seems, in the post-COVID[-19] era,” he said. “I’m seeing more and more rental agreements or allowances in car policies being stretched to the max because of that.”

 

Bost said adequate liability limits are the most important consideration when purchasing car insurance, particularly in today’s litigious society. One way to offset the cost of higher liability limits is by choosing a policy with a greater deductible, he added.

 

“If you currently have a $500 deductible on your car and you move that to $1,000, is that going to break you? Probably not. Is it going to be irritating? Absolutely, but it’s not going to break you financially. Most people, if they have to come up with $75,000 or $100,000, that could break them,” he said. “What I explain to people is, ‘You deal with the irritations. I’ll take care of the devastations.’”

 

Along with driving history, vehicle type helps determine insurance premiums. Bost said it might come as a surprise that vehicles frequently driven by young drivers, such as Honda Civics, may carry higher insurance costs than luxury cars in some instances. Meadors recommended narrowing one’s car search down to a few models, researching collision repair costs and then discussing with an agent what the insurance costs might be.

 

LIFE INSURANCE

 

Life insurance is an important topic, albeit a difficult one for many people to think about or plan for. Bost said having the right coverage can make all the difference.

 

“If something happened to you, how much coverage would you need to replace your income if you weren’t there?” he said. “People will be like, ‘Well, I don’t want to spend money on that.’ I tell them, ‘If you had a machine that spit out cash, would you insure it if somebody stole it or something happened to it?’ Everybody says yes there. You are that to your family, so why not insure that for your family to make sure they’re taken care of?”

 

Whether one chooses term life insurance, whole life insurance or a hybrid product known as universal life insurance depends on one’s situation and goals, he said. Usually cheaper up front, term insurance lasts for a specific period and pays off only if there is a death. Whole life covers a person’s entire lifespan and builds cash value over time. Bost likened the distinction to renting versus owning a house. However, either can do the job of replacing income lost due to death.

 

He added that there are various options available, including policies that cover long-term care and a disability rider that will pay the premium if the insurance holder becomes disabled.

 

Todd said the best way to start is by asking a simple question:

 

“If something happened to me tomorrow, what would my family need?” he said. “Think about replacing income, paying off a mortgage and other debts, covering education and final expenses, and protecting your family’s standard of living. Then consider how long the need will last and whether term insurance, permanent insurance or a combination makes sense. Beneficiary designations should also be reviewed after major life events.”

 

His biggest advice was to not wait. People might not feel like they need insurance when they are young and healthy, he said, but in reality, that is often when life and disability coverage is the most accessible and affordable.

 

“Whether you’re a young professional in Little Rock, a family in Conway or a business owner in rural Arkansas, it is easier to put a protection plan in place before you need it,” he said. “Review your health, life, disability and long-term care strategy each year, and make sure it still fits your family, income, debts, healthcare needs and goals.”

 

HEALTH INSURANCE

 

Amid rising healthcare costs, Arkansas families and employers are looking more closely at how to manage expenses without giving up access to quality care. Todd said one of the top issues his firm is watching is pharmacy benefit manager reform.

 

“Prescription drug costs are a major concern for employers and families, and policymakers are paying closer attention to pricing transparency, rebate arrangements, pharmacy reimbursement and the flow of money through the prescription drug supply chain,” he said. “That conversation is especially important in Arkansas because it affects employers, consumers and community pharmacies.”

 

He added that he has seen continued attention being paid to price transparency, mental health parity, consumer data privacy, cybersecurity, and the use of artificial intelligence in underwriting and claims.

 

Todd also urged consumers to not just focus on the monthly premium, taking into account the deductible, copays, coinsurance, out-of-pocket maximums, provider network, prescription formulary, and whether one’s doctors and hospitals are in network.

 

“For Arkansas residents, access matters,” he said. “Someone in Little Rock may have different provider choices than someone in a rural part of the state, so confirm that the plan works where you actually receive care.”

 

He added that he often encourages clients to consider disability insurance, long-term care and health savings accounts.

 

“Disability insurance may be the most overlooked because a person’s ability to earn an income may be their largest financial asset,” he said. “I also encourage long-term care planning, which may involve traditional coverage, a life policy with a long-term care rider, a hybrid policy or another funding strategy.”

 

Bost said his company offers supplemental health insurance such as a hospital medical policy that pays $1,000 or $2,000 in the event of a trip to the hospital or emergency room — great for families with children who play sports or have a tendency to get injured. He also offers short- and long-term disability insurance.

 

“It’s usually in your best interest to carry some sort of disability because just straight Social Security, people can run the numbers and see if they can live off that, but a lot of folks can’t live off just the government-subsidized disability policy,” he said. “If you can’t live off the numbers that it shows if you’re disabled that the government pays, then at that point in time is when you would need a disability policy.”

 

 

LIFE AND MARKET CHANGES

 

Another policy Bost recommended is a personal liability umbrella that protects against any sort of liability situation, from car accidents to guests being injured in a home. He said the policy is particularly important for people who are saving for retirement.

 

“Let’s say you’ve got a stock account, right, and you only have $25,000 in property damage like what I was talking about earlier, and you damage a $100,000 car. Now you’ve got $75,000 that you owe. They can take that money from that stock account from you, and you’re back to square one when you could have had a policy that cost a few hundred bucks a year that makes sure that that doesn’t occur.”

 

He added that as a family’s net worth grows, more liability coverage is needed to ensure adequate protection. On the other hand, people who are retired and have Medicare benefits may not need medical payments coverage on their vehicles, allowing them to reduce that coverage.

 

“As you age and progress, your needs change,” he said. “When you have kids in the home, it looks different than when you don’t, so meeting with an agent at least every other year is very important.”

 

Meadors said the market is softening for commercial insurance, and he expects home and auto insurance rates to come down, as well. He and Bost both noted that there have already been some decreases in car insurance rates thanks, in part, to artificial intelligence driving efficiencies in the actuary process.

 

The race is on to lower premiums for the American public while ensuring quality coverage, Meadors said, adding that agents and brokers are shopping coverage more than they used to and doing everything possible to fight back against the hard market of the past few years.

 

“Things are changing for the betterment of the consumer,” he said. “They need to know their agents are now worn out with the hard market. We get it. We pay higher premiums ourselves. My personal insurance has gone up a crazy percentage, just like everybody else’s has, so we see it. We are pushing back, and we’re starting to be able to have some good effects with that.” 

 

SEE THE FEATURE BELOW AND IN OUR OCTOBER 2026 ISSUE OF AY MAGAZINE