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Inflation's Effect on Insurance

Apr 14, 2022

Inflation has been a topic at the forefront of developing news. According to the U.S. Bureau of Labor Statistics, the Consumer Price Index for All Urban Consumers rose to 7% in 2021.

Insurance Companies are experiencing the effects of inflation as well. They now require additional funds to repair or replace buildings, equipment, and/or autos during claims. This has to do with several market factors involved in settling claims:

Factors Contributing to Higher Repair/Replacement Costs

  1. Higher Building Material Costs, Higher Repair Costs: Between 2020 and 2021, the cost of building materials rose 11.9%. Lumber rose a staggering 42% over the past year1. As a result, home repair costs are up nearly 15% overall.
  2. Skilled Labor Shortages: Roughly 60% of builders surveyed2 report a skilled labor shortage in the home-building industry, which is driving up labor costs involving new construction.
  3. Supply Chain Issues: Shortages on microchips and other critical auto parts have impacted the cost to repair or replace a vehicle after an accident. New car prices rose 10.6% between Oct. 2020 and Oct. 2021, while used car prices jumped up nearly 32%.3

Your Responsibility to Confirm Correct Values


Many people are unaware that it is their responsibility to confirm the value of their property is correct, not the insurance company’s. If property, which including dwellings, outbuildings, and farm equipment, is under-insured (by more than 20% for most policies) at the time of a claim, most policies include a "co-insurance" clause, in which the percentage at which you were under-insured is calculated and deducted from the claim payments.

Keeping up with correct property values becomes a more urgent concern during periods of high inflation because rapidly rising values can increase the likelihood that the co-insurance clause could get applied.

As if that wasn’t complicated enough, the insured value of your property can be different depending on if your insurance policy has a Replacement Cost settlement (which does not depreciate your home or property’s value based on age) or Actual Cash Value settlement (which applies depreciation based on age).

Our Agency can assist in correctly determining the insurance value of your home, outbuildings, and other property to help minimize the chance of being under-insured. Reach out to us today to set up your policy review.


  1. CoreLogic Quarterly Construction Insights (Q2 2021)
  2. National Association of Home Builders. “Building Material Prices: Large Increases Year to Date” (Sept. 2021)
  3. CNN Business. “’This is a crisis now.’ Biden official pleads with Congress to immediately address computer chip shortage” (Dec. 2021)

Clarence's Retirement Announcement

Apr 1, 2022

Clarence-1-headshot-IMG_4213.jpgWe’re happy (and sad) to announce Clarence's retirement on June 1st, 2022, after 48 outstanding years.

Clarence founded the agency along with his wife, Linda, and they have been a big part of the Agency's success. He earned his bachelor’s degree from EIU in 1972, and he started selling Life insurance in 1974. In 1977, he started Clarence Miller Insurance with the purchase of the Doyle Johnson Agency. Over the years, he served on Agent Advisory Committees for multiple insurance companies and oversaw the agency becoming the premier insurance agency in the Coles County area.

He has been a great mentor, helped countless customers, and been a reliable resource and friend to us all.

Here’s a personal note from Clarence:

I have enjoyed my time with you and feel fortunate to have been able to say this. It is a true blessing to enjoy your job, but it is time for me to say goodbye! I will miss all of you.

Please join us in congratulating Clarence on his service, leadership, and friendship over the past 48 years. We wish him all the best!

~ The Tomco Team

We are now Tomco Insurance Agency

Feb 1, 2020

We treasure the close and trusting relationships we have with our clients, so we wanted you to be the first to know. As of this February, we have changed the name of our agency to Tomco Insurance Agency.

When we first opened our doors in 1977 as Clarence Miller Insurance, Clarence and Linda were the only employees. We have grown and evolved over the last 40+ years, and we are now represented by a team of six employees. Our new name, Tomco, is short for Tomshack & Company, a fitting reflection of how together we work as a team to fulfill your insurance needs.

Along with this name change, we are excited to unveil an updated website to help make insurance simpler for you: "TomcoAgency.com". We will also be updating our email addresses to match. To contact us, simply replace the @clarencemillerins.com in our emails with @tomcoagency.com. Emails sent to the old addresses will continue to be received for the time being, but we urge you to update your contacts as soon as possible.

We are grateful to you not only for allowing us to serve your insurance needs, but also for your loyalty and friendship. You are truly an important member of the Tomco family, and we look forward to working with you for many years to come.

With appreciation,
~The Tomco Team