THE GREAT INFLATION ROLLERCOASTER CON

We all know the drill: inflation rises, and suddenly everything costs more. Your insurance premiums shoot up, your utility bills get a little too friendly with your bank account, and even your morning coffee starts feeling like it was brewed with liquid gold. But here’s the kicker — when inflation eases, do those prices ever return to their pre-inflation glory days? Spoiler alert: not really.

Take car insurance premiums, for example. When inflation hikes up the cost of car repairs and medical expenses, insurers waste no time adjusting their rates. It’s like they have a sixth sense for finding your wallet. And homeowners? You’re not off the hook either. Rising costs for building materials and labour mean your property insurance goes up faster than a helium balloon at a kid’s party.

But when inflation decides to take a chill pill, do those premiums drop like they’re hot? Nope. Instead, it’s more like watching a sloth attempt a high dive. Companies take their sweet time, cautiously inching prices downward — if at all. Why? Let me count the ways:

1. Slowpoke Syndrome: Businesses like to see if lower costs will stick around before passing any savings on to you. After all, nobody wants to be the early bird who gets the worm but loses the margin.

2. The “Keep It for Ourselves” Fund: Lower costs might mean bigger profits, and who doesn’t love a padded bottom line? Companies might use the extra cash to “invest in innovation” or “ensure sustainability,” but let’s be real: your wallet probably isn’t seeing the love.

3. The “Everyone Else Is Doing It” Effect: If competitors aren’t lowering prices, why should they? It’s like an unspoken pact to keep us paying more for less.

Take this little gem of a case study:

Case Study: Home Insurance Rates

A homeowner’s tale goes something like this: when natural disasters and skyrocketing construction costs strike, your insurer swoops in to say, “We’re adjusting your rates to reflect increased risks.” Fast forward a year, and construction costs stabilise. Does your premium shrink faster than your optimism during tax season? Dream on. Instead, you’re told, “We’re maintaining reserves for future claims” or some other line straight out of the “How to Keep Profits High” handbook.

So, what can you do? Well, you could:

• Shop Around: Loyalty is overrated when it comes to insurance. Find a competitor who’s willing to woo you with better rates.

• Call Their Bluff: Ask your provider for a discount or review. Sometimes, just asking can shake loose a few bucks.

• Vote With Your Wallet: If a company won’t budge, take your business elsewhere. It’s the capitalist way, baby.

In the end, prices tend to go up like a hot air balloon but come down like a deflated beach ball — slow, saggy, and not very satisfying. So, keep your eyes peeled and your options open, because when it comes to your hard-earned cash, you deserve better than the inflation boomerang.