AUTO INSURANCE RATES ARE ON THE RISE, NATIONWIDE, AS INSURERS REEL FROM LOSSES

The US Auto Insurance sector is grappling with its most significant crisis in three decades, with insurers facing challenges that have led to soaring price hikes. Auto insurance costs increased 16.9% from the previous year, according to the consumer price index (CPI) for June 2023.

 

Furthermore, a recent study by J.D. Power found that nearly a third of auto insurance customers have been hit with a rate increase in the past year, regardless of their driving records. This surge has been attributed to never-before-experienced losses for insurers, as they face larger expenses associated with repairing or replacing vehicles, hampered by inflation, supply chain disruptions, and advanced car technologies that drive up repair costs. 

 

The post-pandemic return to pre-pandemic driving habits has also led to heightened claims, with accidents, litigation, and medical costs now increasing. Amid this environment, insurers on average reported losses of 12 cents for every dollar of premium written in 2022, again according to J.D. Power.

 

To cope with these losses, major players such as State Farm and Allstate have been compelled to increase premiums. State Farm has increased rates by 13.3% in Texas, 8.2% in Pennsylvania, 6.9% in California, and 6.5% in Illinois, and recently implemented a 17.3% rate hike in Louisiana!

 

Allstate, meanwhile, secured approval for 83 rate increases in various states in the first quarter of 2023; then, in June, Allstate requested to increase New Jersey car insurance rates by 29%. It wasn’t alone: GEICO asked for a 26% New Jersey rate rise.

 

If you want to avoid these kinds of rate increases in your car insurance here in Maryland, call Butch Tilley today to see what options are available to you! We can help you balance your coverage level with your insurance expense.