Auto insurance rates on the rise

[REWahoo]

According to this article, we can all expect big increases in our auto insurance rates.

Among the reasons: "More people are driving, lower gas prices and higher speed limits," explained Robert Hartwig, president of the Insurance Information Institute (III), a lobbying group for the property-casualty insurance industry.

And, he might have added, more fatalities. The National Safety Council (NSC) estimates that 38,300 people were killed nationwide on roads last year and 4.4 million were seriously injured. "2015 was likely the deadliest driving year since 2008," said the NSC, a nonprofit organization that promotes health and safety in the U.S.

Another factor is that auto insurers' profitability has been falling for a decade. Loss ratios for insurers have been rising for 10 years, according to the III's Hartwig. In flush times when interest rates are high, insurers can make this up from their vast investment portfolios. But the 2015 return on their net worth is likely close to zero -- or even negative.

 

[papadad111]

Not to mention the auto replacement cycle which has been peaking for the past 18 months or so meaning there are more newer vehicles on the road (and those are more expensive to fix when crunched)

Y'all drive safely.

 

[ExFlyBoy5]

Allstate has already notified policy holders here in Georgia that they can expect an average 25% increase (but up to 50%+) with their next renewals. Thankfully, I don't have Allstate, but I assume that I too will have sort of increase next year (after two years of DECREASES!)

I blame all the idiots that can't put their damn phones down when they get behind the wheel.

 

[aja8888]

I blame all the idiots that can't put their damn phones down when they get behind the wheel.

That's a huge part of the problem. Recently, step daughter drove into the back of a small Honda on the freeway at night while texting her brother a video clip. She totaled both cars and injured the party in the Honda. Nice.

She got a ticket and her insurance dropped her. So now she is in the state insurance pool and paying a big premium.

 

[ExFlyBoy5]

That's a huge part of the problem. Recently, step daughter drove into the back of a small Honda on the freeway at night while texting her brother a video clip. She totaled both cars and injured the party in the Honda. Nice.

She got a ticket and her insurance dropped her. So now she is in the state insurance pool and paying a big premium.

Oye. Hate to hear that. It's a "stupid tax" that can be very expensive (not to say your step daughter is generally stupid..but yeah, that specific act...very stupid).

 

[ivinsfan]

That's a huge part of the problem. Recently, step daughter drove into the back of a small Honda on the freeway at night while texting her brother a video clip. She totaled both cars and injured the party in the Honda. Nice.

She got a ticket and her insurance dropped her. So now she is in the state insurance pool and paying a big premium.

Hate to hear of damage and injuries..I'm starting to think in cases like this the drivers should have their licenses revoked for a year so they will think twice about such reckless behavior.

 

[Bamaman]

Allstate has already notified policy holders here in Georgia that they can expect an average 25% increase (but up to 50%+) with their next renewals. Thankfully, I don't have Allstate, but I assume that I too will have sort of increase next year (after two years of DECREASES!)

I blame all the idiots that can't put their damn phones down when they get behind the wheel.

Our state allowed Allstete to increase rates about 5.5% recently.

As one's cars get older, values go down. However repair costs continue to increase. But to see 25% rate increases some have reported, rate increases appear excessive.

Unfortunately the lowest auto rates only come when you have homeowner insurance grouped together. That's maybe 30% difference.

It's important to keep down claims and keep a clean driving record if at all possible. And keep a high FICO score. Whenever auto rates get too high, you'll then be in a position to shop for policies that are more reasonably priced with a company welcoming your business.

 

[aja8888]

Hate to hear of damage and injuries..I'm starting to think in cases like this the drivers should have their licenses revoked for a year so they will think twice about such reckless behavior.

I would like to see that too. But in her case, being divorced and living from paycheck to paycheck (yes, it happens), she would lose her job and apartment and have to move in with us, which she has done before.

 

[ivinsfan]

Isn't that the problem, people need cars to function and yet just don't take driving seriously.

There's a intersection 3 miles from my house where a "stormchaser" blew a stop sign and killed a couple in their mid 60's on their way home. His excuse, I was in a hurry and I don't know the area, so I didn't realize I had to stop. Hello,weather channel wannabe it was still an intersection, he pleaded out to a misdemeanor careless driving...it doesn't seem like a big enough penalty for killing 2 people.

 

[harley]

I know that newer cars have all sorts of safety devices (back up cameras, collision avoidance gear, etc). I wonder if that will make any difference? But with the nav and audio and other Bluetooth apps in the cars now I find them even more distracting than driving my old car while talking on the phone was. I suspect the only thing that will ever make driving safe will be wide acceptance of self driving vehicles.

We have 3 cars, but we leave one at each home when we snowbird, so two cars wherever we are. I discovered I can suspend most of the coverage on the garaged car while we're not in that location. It's a nice bit of a savings, definitely worth doing a little paperwork for.

 

[kgtest]

That's a huge part of the problem. Recently, step daughter drove into the back of a small Honda on the freeway at night while texting her brother a video clip. She totaled both cars and injured the party in the Honda. Nice.

She got a ticket and her insurance dropped her. So now she is in the state insurance pool and paying a big premium.

Going to a benefit tonight to support a small child who lost her mom and critically injured dad. Girl who rammed them couldn't wait to send the text "ok". Sad.

 

[braumeister]

I'm primed if rates go up this year.
When we moved last year, my car insurance went up a LOT.

Simply a move from one suburb of a major city to another, but we went across the state line and I was astounded at how much more it costs here.

Median car insurance premiums across the U.S.

 

[aja8888]

. I suspect the only thing that will ever make driving safe will be wide acceptance of self driving vehicles.

Not trying to be a pessimist here, but whenever someone mentions self driving cars, the first thing that jumps into my mind is "insurance". I am not in the insurance business but know enough about risk management (that's what I did for 30 years in oil & gas) to question how insurance companies will insure that risk?

Granted that technology is great and most of us are capable of keeping our phones turned on and working and figuring out why our home wireless system has cratered (correct?), but these cars will be "out there" with all the crazies that are still aiming, consciously or not, their 4,000 pound SUV at 60 MPH down city streets and through stop signs while texting. My thoughts are that given the variables with technology failures and the human element thrown in, the risk to own and operate one of these automatic cars will be tough to assess. Consequently, I would guess that insurance rates for self driving cars would be high.

And once one does get into a wreck, if the electronics are damaged severely, it may be difficult to determine who or what is at fault.

This is all my opinion and not based on any facts.

 

[ExFlyBoy5]

I know that newer cars have all sorts of safety devices (back up cameras, collision avoidance gear, etc). I wonder if that will make any difference?

Just imagine how many people would be killed and maimed if it WASN'T for the safety advancements of the last 20 years. I know I am not immortal, but I am pretty happy that the interior of my car basically turns into a stay-puft marshmallow if some idiot isn't paying attention and runs into me. This is one of biggest reasons why I refuse to ever own a motorcycle. It's simply not worth the risk.

 

[Midpack]

I suspect the only thing that will ever make driving safe will be wide acceptance of self driving vehicles.

Not trying to be a pessimist here, but whenever someone mentions self driving cars, the first thing that jumps into my mind is "insurance". I am not in the insurance business but know enough about risk management (that's what I did for 30 years in oil & gas) to question how insurance companies will insure that risk?

Granted that technology is great and most of us are capable of keeping our phones turned on and working and figuring out why our home wireless system has cratered (correct?), but these cars will be "out there" with all the crazies that are still aiming, consciously or not, their 4,000 pound SUV at 60 MPH down city streets and through stop signs while texting. My thoughts are that given the variables with technology failures and the human element thrown in, the risk to own and operate one of these automatic cars will be tough to assess. Consequently, I would guess that insurance rates for self driving cars would be high.

And once one does get into a wreck, if the electronics are damaged severely, it may be difficult to determine who or what is at fault.

This is all my opinion and not based on any facts.

Interesting line of thought. When there are very few if any owner operated vehicles left, insurance may no longer be necessary, or at least much less expensive (relatively). The few who still operate their own vehicles, will pay relatively high insurance rates.

And during the presumably lengthy transition from today's vehicle landscape to self-driving, idiot operators will probably still hit self-driving vehicles too often, so insurance rates for owners of self-driving cars may not change much when it's just early adopters.

It will probably take decades, but owners of self-driving vehicles may not need insurance some day. And the cost of insurance for manually operated vehicles may become prohibitively expensive. Time will tell...

 

[scrabbler1]

Just imagine how many people would be killed and maimed if it WASN'T for the safety advancements of the last 20 years. I know I am not immortal, but I am pretty happy that the interior of my car basically turns into a stay-puft marshmallow if some idiot isn't paying attention and runs into me. This is one of biggest reasons why I refuse to ever own a motorcycle. It's simply not worth the risk.

You can go back further than 20 years. While ABS and airbags grew in popularity a lot in the 1990s, earlier safety features such as automatic seat belts began finding their way into cars in the 1970s. My dad happened to drive one of those cars, a 1978 VW Rabbit he had just bought new a few months earlier that year when he was involved in a head-on collision at 40 MPH. He got banged up pretty good but because of the automatic seat belts (remember that seat belt use was not common back then, and no state had passed any mandatory seat belt laws until the early 1980s) in the Rabbit, he was spared any devastating or life-threatening injuries.

When I began driving in 1981, I didn't need any state law to mandate seat belt use whenever I was driving. It was the "law" in my car.

 

[Totoro]

I am not in the insurance business but know enough about risk management (that's what I did for 30 years in oil & gas) to question how insurance companies will insure that risk?

They won't for the most part. At fault risk means the manufacturer is at fault. They will self-insure, similar to a faulty airbag. It's covered in the warranty.

So only risks left to insure are bad maintenance and willful destruction. The former rests with the operator (owner), which most likely isn't an individual but a transportation company.

Accident rates are expected to drop with a factor 4 once sufficient self-drivers are on the road, so even during transition the remaining driver population may experience a drop in their insurance rates.

And once one does get into a wreck, if the electronics are damaged severely, it may be difficult to determine who or what is at fault.

I'm running trials on connected car data. It's more the opposite actually. Every microsecond of the car is being recorded and it's very resilient to high G forces and impacts.

Just yesterday I looked at crash data from an individual going into a wall at 60+ mph because he nodded off. It's almost voyeuristic the level of detail available on crash data even today (with recent connected cars). In addition some of that data is being uploaded on the fly, especially when the motor management signals something is wrong.

 

[Senator]

I have heard, through my insurance agent, that insurance fraud is way up. I even see it in my tenant screening.

A person will lease two cars and insure both in their own name, and the boyfriend with a bad driving record will drive one.

Or a car will have an accident that can be driven away from, and full coverage will be put on right away. A few days later, a claim is submitted.

If I only had a limited number of assets, I would not even buy insurance.

 

[mystang52]

I live in New Jersey, and just got notice from Farmer's that my premium going up 15%. I had one non-fault claim (car hit me while on my bicycle, which is covered by no-fault here in NJ) back in 2014 but nothing else.
Re: texting it is downright scary. I swear I can find a texting driver EVERY time I am out on the road.

 

[Midpack]

Re: texting it is downright scary. I swear I can find a texting driver EVERY time I am out on the road.

+1. I'll guarantee I see someone texting, emailing or surfing EVERY time I am on the road. And it's not just Millenials, middle-aged and older drivers are as bad if not worse IME. Maddening as it inevitably increases accidents...

I also see people talking with their phones against their cheeks in newish cars, many/most undoubtedly have Bluetooth going unused?

 

[purplesky]

That's a huge part of the problem. Recently, step daughter drove into the back of a small Honda on the freeway at night while texting her brother a video clip. She totaled both cars and injured the party in the Honda. Nice.

She got a ticket and her insurance dropped her. So now she is in the state insurance pool and paying a big premium.

About 2 months ago I was sitting at a red light with a cop in front of me.
A young girl driver behind me was stopped but while she was texting she rolled into my bumper.

My son and I both looked back at her and she went right back to her phone.

We couldn't stop laughing. It was such a light tap on my bumper I just said forget about it.

True story!

 

[INTJ10]

About 2 months ago I was sitting at a red light with a cop in front of me.
A young girl driver behind me was stopped but while she was texting she rolled into my bumper.

My son and I both looked back at her and she went right back to her phone.

We couldn't stop laughing. It was such a light tap on my bumper I just said forget about it.

True story!

Thank you very little. You were being nice but you reinforced her bad behavior so now she will get somebody else.

 

[GTFan]

Allstate has already notified policy holders here in Georgia that they can expect an average 25% increase (but up to 50%+) with their next renewals. Thankfully, I don't have Allstate, but I assume that I too will have sort of increase next year (after two years of DECREASES!)

We're with USAA here in the ATL, they recently sent an 'I'm sorry we have to raise rates' letter but the increase was less than 10%. Sucks but I can live with that, it came out to a little over $10 a month for three cars with a 22-year old son still at home so it's not excessive to me.

That's the first time I've seen that kind of apology from them though, so I guess they are feeling the heat.

 

[travelover]

Has anyone had their rates increase when they moved onto Medicare? My understanding is that Medicare does not coordinate with auto insurance medical coverage in the same way as private insurance.

 

[MRG]

Hate to hear of damage and injuries..I'm starting to think in cases like this the drivers should have their licenses revoked for a year so they will think twice about such reckless behavior.

In this state, MO, it's still legal to text and drive if you are an adult. Sad. IMO first text is 50k volts, the next the vehicle just stops. Forever!

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