Your insurance premiums, and the premiums of thousands of customers, go into a big bank account. For the small percentage of customers who have claims, these claims are paid out of this account. If the insurance company calculates rates properly, by the end of the year, they have paid out the total amount of money accumulated into the account. If the account has a lot of money left over, rates go down the next year. If they spend more money than what was in the account, they will have to raise rates to make sure they do not keep operating at a loss.
A year ago the cost of building materials doubled due to supply chain issues. The labor shortage that resulted from the Covid lock down caused there to be fewer workers. This shortage affected the auto repair industry as well as the home repair industry. When labor shortages occur it costs more money to hire and keep a worker in your company.
So materials costs and labor costs have gone up significantly over the past year. It costs more to repair homes and cars. When this happens, insurance companies have to raise rates to be able to pay the more expensive claims that are coming in.