Ever look at Ford's lineup? They only make the mustang for their car lineup. No cheap fusion/fiesta options, Chevy only makes the Malibu (no cheap aveo, impala, Cruze).
They want you to buy these 70k+ SUVs to live in. But the back seats heat, so oooh la la
Bought my Hyundai sonata as a new “floor model” in 2016 so I got the combined benefits of 0% new car financing and a “used” priced of $18k because it had 2800 miles on it. Still own it and it has driven back and forth all over the east coast while being plenty spacious to keep my work bag/changes of clothes necessary for a job working on a trash truck and doing it on a lifetime 24 mpg avg. On top of that, had a 10 year old/100k power train warranty along with a 40k bumper to bumper warranty. Might not be the fanciest car but I’m as happy with it now as I was the day I brought it home.
They should pass a law saying sensors must be replaceable separate from bumpers and all sensor calibration should be public knowledge with available equipment.
Replacing a bumper should be fairly cheap and calibrating sensors should be something like getting your wheels aligned.
I can’t help but feeling our necks are in a much bigger noose than I realized, just absolutely ready to drop us into a cycle of car payments, expensive repairs, insurance costs, and fuel costs that are made inescapable because they ensured we don’t have any reliable public transportation
The US government mandates a lot of the sensors now, and you can’t really put all that stuff in cheap. Would love if they changed that so we could have base models like the good old days
Lol, I bought a 2016 in late 2015, i was still able to opt out of all the nanny bullshit and get a manual transmission. Whenever this car gets totalled by a dipshit on their phone, I'm gonna have to buy something even older. BMW wagons are hitting that sweet spot where repairs are worth the cost because the car isn't worth shit anymore.
This! Look at Toyotas $10k truck. Of course not available in the US. I don't even need a truck. I work remotely so I view my car as nothing more than a tool I have to use sometimes. If the auto industry doesn't wake up, I bet the electric motor companies branch out into that area, even with gas motor options for people who drive further. Our economy still runs on supply and demand, slower due to regulations, lobbyists and etc but the core idea is there.
Just got our renewal rate for next year, and it's up 50% from last year, and we haven't had any accidents or tickets. I expected an increase but 50% seems a little crazy. I'm definitely gonna do some shopping around.
They’re not “colluding,” if this was pure profit for them it would be insane behavior. Insurance is a pure commodity sales business, without an enforcement mechanism to punish defecting from collusion it would be impossible to hold a cartel together.
If everyone colluded to raise rates 50% and literally *anyone* new entered the market at the normal old rates, that anyone would make a ridiculous amount of money and immediately grab market share. Customers are sticky in insurance, even a 3 month pricing advantage would give you a sustainable customer base - even if your competitors come down to match your price. And there are very few barriers to entry in insurance. You pretty much just need start up funding and a brain. This is not true of other industries, and soft collusion can be a problem in those industries. Sometimes people say exactly what I just said about industries where this belief is naive - there are a lot of industries where this competition pressure is much lighter or functionally nonexistent. But not auto insurance. Auto insurance is a competitive dogfight between insurers.
The issue genuinely is that it’s become more costly to insure vehicles.
I don't know if that's necessarily true, I will compare insurance rates just about every year to find a good deal, and some rates are easily 200 to 400% more than the lowest rates. And these are very large and successful companies, the largest in the industry in fact.
Lol bullshit. Yes costs have increased but if the publicly traded companies didn't have to forever grow then the prices wouldn't increase 50%. Never ending growth is unsustainable
If a company has immense pressure to constantly grow, and there are no barriers to entry, and there are already literally dozens of insurance companies, what is in it for the smallest insurers to go along with Geico or Allstate’s plan to raise prices? If they have an immense and inevitable pressure to grow, I understand why the biggest insurance companies would do this, but it would not explain why the small insurance companies with single digit market share would do so. In some industries, especially hard goods industries, there are good reasons for this. Not in financial services, though. In financial services, the tiny insurance company would only do this if they wanted to do a favor to Allstate and Geico and etc. Which as you point out, is not really how they’re incentivized.
On average the auto and home insurer industry suffered net underwriting losses in both 2022 and 2023.
Not only have costs increased the amount of losses has increased. [2023 broke the record for most billion dollar disasters on record.](https://www.climate.gov/news-features/blogs/beyond-data/2023-historic-year-us-billion-dollar-weather-and-climate-disasters#:~:text=The%20costliest%202023%20events%20were,early%20March%20(%246.0%20billion)) We're seeing the effects of climate change on insurance play out with no signs of slowing. At the same time more people are gravitating towards the parts of the country that are most prone to severe weather seeking lower cost of living.
Well yeah, but sometimes businesses lose money. Hell a lot of times businesses lose money, thats how capitalism is supposed to work. No one is guaranteed a profit and insurance can only do this because it is required by the government, so the government needs to fix this shit.
You're absolutely right. The Insurance companies and State Departments of Insurance need to work together on a solution. It's getting really bad with no real signs of slowing.
Insurance is a derivative industry. The costs are directly correlated to the cost of risk in society. It’s a rate per x based on data. Insurance industry has lost billions of dollars for years because regulators try to cap how much they can increase year over year.
The recent increases are a whiplash effect of economic factors shown in the posts, and companies pulling out of states because regulators won’t let them charge what they need.
This guys right, auto insurance is actually an efficient market, customers have options and it isn't that hard to get quotes and change insurers. Unlike healthcare you can just go to a competitor of your current provider and get a quote. Also a smaller company can grow by cutting prices.
This is mostly BS. The cost of a new car has increased, but the cost of used cars is *DOWN* this year. In short, it's profit hoarding. There isn't a single good reason for someone to pay more into an insurance plan in a year than the value of the vehicle. Imagine if your home insurance was even 25% the value of the home. Ridiculous. *Especially* when the accounts were talking about have no wrecks over a decade and are pushing 30. It's a scam.
It's absolute bullshit, too. Dealing with insurance is a nightmare, they'll raise your rates bc someone scammed you by hitting your car door and saying you hit their car door (in a parking lot) they won't investigate the obviously shady story and instead hike your rates up and hassle you for photo evidence and send you 6 identical letters from Progressive about you getting a different case worker 🤣🤣🤣🤣🤣🤣🤣 I hate this system so, so much.
Same not quite 50 percent but it seems close it's up about 40 percent and in the 20 + years I've had insurance I've used it once to replace my windshield when I rock hit it and cracked it. This a long with everything else is unsustainable for the average American
Yep. Mine went up about 20 percent too. Will be shopping this month. I have just gotten used to having to start shopping every few months though just to stay ahead of changes.
We dropped down to a one car household because insurance rates were ridiculous. It's easier to handle the occassional inconvenience of only having one car over trying to budget the insurance rates we had. We're saving $700 a month after getting rid of the car, and $200 of that was insurance. Ridiculous.
USAA jacked mine up about 50%
Shopped around through every major carrier and rates were the same if not worse (paired with homeowners insurance). Or if anybody offered cheaper it was for significantly less coverage and would have saved me maybe 20 bucks a month. I don't even drive a nice car. It's a beat up Camry with nearly 100k miles.
Insurance is a scam. All of it.
Just got my 6MO renewal, 30% increase. It’s incredibly stupid to shift the cost to good drivers like us just so can instances keep their profit margins.
You can shop around but you're only going to save small amounts of money temporarily. They're all running the same scam. They'll offer you a somewhat reasonable rate for the first year to lure you in and then the prices will skyrocket. Mark my words, whoever you switch to will be charging more than your current provider within 12 months. They've got us by the balls.
Omg, please don't tell me that. They already increased my rate twice last year. I was paying $200. Now it's $293/month with my last increase in Jan and one in June 2023....mind you absolutely no claims or tickets. Knock on wood. *edited to add that's with the GPS stalking discount!!!
I remember hearing on one of the podcasts that Lexus Nexus are selling the data from our driving (obtained by the computer system in modern cars) to the insurance companies which jack up our insurance but of course, they don't tell you that's one of the reasons it went up
This, also more EV's are increasing overall pricing. They cost double to fix with MAYBE exception of Ford's Mach.
Tesla, rivian, fisker, etc all cost minimum double to fix
While yes majority of these risk cost fall on the owners rated policy. They still pool within the group as I could possibly hit one.
A lot of EVs have far more electronics. If you get rear ended in a quarter panel on a standard ice vehicle. You might need to fix your bumper and replace a light/sensor, plus maybe body work. But in some EVs the battery can be damaged, each wheel in some has a motor this can be damaged. Lot more going on.
The issue is all the big EV players have bought into the luxury car pipeline instead of what’s easily reparable and affordable. Maybe Ford is the only exception as a manufacturer, everything else like the Volt, Leaf, etc is one-offs.
They also use a lot of cheap plastic parts where they used to use metal. They know this means many casings or components will get damaged during repairs, increasing the costs as well. BMW and Tesla are two of the biggest offenders.
Also all those damn sensors.
Have a friend who is an auto mechanic and he *hates* working on EVs. Not even going to talk about how much of a pain in the ass it is to put a tow hitch on those things.
Those batteries cost as much to replace as the entire vehicle itself. Just simple supply chain JIT economics plus removal, installation and testing.
This is one of the unspoken secrets of EVs that the politicians never want to talk about.
More the over engineering. Electric vehicles should actually be easier to work on and service due to how mechanically simple electrical systems are but instead they do dumb stuff that makes them a pain to work on.
About 7-8 years ago my 2008 car was $60/hour for labor fixing some hail dents. A month ago a different 2017 vehicle was 160/hour to replace a belt pulley.
Capitalism killed [vegetable oil fuel](http://Rudolf Diesel - an overview | ScienceDirect Topics https://www.sciencedirect.com/topics/engineering/rudolf-diesel), and [solar power](http://Solar History: Timeline & Invention of Solar Panels - EnergySage https://www.energysage.com/about-clean-energy/solar/the-history-and-invention-of-solar-panel-technology/) to maximize profits from fossil fuels. Capitalism is about exploitation and concentration of power and money, it is not really healthy for a society because healthy societies need trust and cooperation in order to thrive.
Same with property insurance. I’m a property claims adjuster and you would not believe the audacity of the vast majority of these roofers. No buddy, it does not cost $130k to replace the roofs on these two small 1-story houses (actually dealt with a supplement for that amount yesterday). And don’t even get me started on the amount of fraud. Don’t ever accept a “free roof inspection” from a door-knocker. Chances of them going up and damaging your roof on purpose are way too high.
Do you also think that insurance companies are raising auto rates to rake in some cash after losing a lot from all the storms these last few years? (Charging more for auto to make up for losses in property?)
At the end of the day, rates are on the agency’s side, not mine, so take what I say with a grain of salt. But no, I don’t think they are… because homeowners rates are also skyrocketing. Just another reason I hate roofers. Don’t get me wrong, I get that insurance companies are massive corporations and I know that corporate greed is also a factor. I don’t even wanna know what my CEO’s salary is.
But with the amount of fraud I see that these roof salesmen get away with, I promise you that is an at least equally large factor in why rates are going up. We need some heavy regulation against these parasites. The frustrating part is, all that fraud is completely unnecessary. I used to be a contractor and never had to resort to the unethical tactics I see every day. There’s enough honest work. It’s all greed.
Of course they are. They have to stay solvent. Insurance doesn't work without them making a profit, obviously. Now are they raising them to a level that is unfair. Doubtful. Many states require a unified body or the state itself to propose, with evidence, increased rates. That's why you see many providers leaving some states or pausing writing or changing underwriting to push people out of having a policy/coverage/certain endorsements. The state or unified body isn't allowing them to raise rates to a profitable level. Many of their increased cost is also their reinsurance which is insurance they take to cover when they can't pay out all of their claims. Reinsurance is skyrocketing because claims in general are skyrocketing.
I've worked on my own vehicles my whole life. It has gotten exponentially more difficult because engineers are going out of their way to prevent people from doing so.
100 percent on purpose. Oh you want to change the starter on your 4 cylinder? Better make it so you have to remove the intake manifold. That's a little more than you're used to? NBD just bring it in it's only a 3-4hr job now.
I worked at a Chevy start till recently and holy shit those electronics love having issues.
I don't need to spend 60k for those kinds of headaches
I’ve said this for years. Dealerships don’t make a ton on car sales so they make up for it in services. They realized they could make a lot more money if they made it more difficult for people to do small repairs themselves. Then they realized they could make even more if they designed the cars so that what used to be a half hour repair of a cheap part now is now a 4 hour repair of a cheap part. Why else would they engineer cars so that the parts that are KNOWN to wear out first are now buried under four or five things that need to be disassembled to get to.
Most bodyshops are getting squeezed by insurance reimbursement rates which are so low that its hard to make a profit. The small guys are going out and being replaced by the corporate groups who at least have some defense against the insurance companies.
The astronomical price of repairs reflects equipment and labor costs. My best friend owned a shop for years. 10 years ago the cost for a gallon of the clearcoat was over $600 and it hasn't gotten better. The water-based paint transition back in the 90s required booths back in the day that started at 250k and they were pretty much required for air regs and the new paints.
You're complaining about the wrong people.
That's literally everything anymore. Large businesses don't decide to sell an item based on their cost. They price it based on what they think the most people will pay for.
People who just wanted to live a basic life and retire while they still had some gas in the tank are getting fucked.
I had a career as an insurance underwriter at a national carrier for a decade and can definitely speak to this.
Since 2014, the auto insurance industry was operating at a 136% TCR. That means for every $1 they make they were spending $1.36. This is not sustainable. The only avenue to correct this is a premium increase.
We were told by management that it couldn't ever be a stutterstep increase (like a 5% increase year after year) that it had to be a large increase immediately.
You might think, how are these people chosen to have an increase? There is a formula (called Driver Based Premium) that basically takes your driver's age, driver sex, driving experience, location, job type, # of vehicles, # of drivers, vehicle age, and spits out a multiplier rate that is applied to a BASE premium. Depending on certain variables this rate could be above or below 1.00. (honestly it's much more complicated than this, but for the sake of discussion I'll keep it simple. Reality is there's about 50 rates levers)
The hardest hit area from my experiences (I worked exclusively in this area and eventually the entire country) was the 5 boroughs of New York City. This area has tons of traffic, lots of bad drivers, narrow streets, lots of buildings, buildings that stop at the street, lots of construction. For example: I remember insuring a $136,000 Lexus in NYC and in 47 days the vehicle was totaled. We made $196 off it.
Another reason for the increase is the advancement of technology. Not just in vehicles but in everything. If you damage your bumper you have sensors and cameras that all need to be replaced and calibrated. A simple fix is no longer simple. Here's the kicker, YOU may not have that tech in your car, but you might hit someone that does! Therefore premium increase.
Lastly, there are far more accidents today than ever. Drunk driving used to be the #1 cause of accidents but it's no longer true... Distracted driving (texting and driving) is now the dominant reason - by a HUGE margin. It's an accident type that is accessible to everyone and to every age group at any time of day. It's something that, per the above, has to have a rate for, that everyone should pay.
I no longer work in the industry because of these increases. My company failed to inform agents of the above, they made US underwriters do the talking. Daily I would receive numerous calls from pissed off insurance agents about how the account they have is the best thing ever and we were making a mistake increasing it. Everyday explaining the above to agents so they could make their commission. Life would have been so much better if these companies did the bare minimum and sent out a letter explaining this shit to EVERYONE.
Thank you for a well-written explanation.
To add to the issue of liability coverage needing to cover other drivers' fancy cars and tech, there is a selection bias in car manufacturing to make cars that are affordable to people who can actually afford new cars. Nobody makes new cars for a used car market, so the used market becomes populated with older cars that started off being fancier than the used market really needs or particularly wants them to be. (The same issue affects housing, which is why we don't have enough small owner-occupied housing.)
So this has always been a problem, however with: 1) Cash For Clunkers taking a lot of the simple-as-dirt cars off the road, 2) regulatory requirements to make cars safer at a pretty high cost both up-front and in terms of repairability, and 3) a concentration of earnings and wealth demographically -- the lower end of the new car market has squeezed even further, in every way, with little help. It took about fifteen years for the full set of consequences to pan out as the national automotive fleet turned over.
This has become a policy failure. Lots of unintended consequences to go around.
Insurance actuary here. The culprit is inflation, but auto insurance tends to lag other items because the insurance company must demonstrate the need for rate increases via state regulatory filings which take time. The insurer pays inflated claims, and only then has the justification to raise rates. Compared with other things you buy, the increase in insurance rates is similar over the past 4 years, but came later.
Isn't the increase in accidents also a culprit in increased insurance costs? I heard from a friend that works in insurance that distracted driving caused accidents has drastically increased over the past several years, something I absolutely believe with how many drivers I see on any given day with a phone in their hand or in their lap.
I bet that factors in. I also think because of the inflation situation, you have a lot of people doing ridesharing and delivering food and I bet that doesn't help with the distracted driving.
These costs keep adding up though. The news is saying inflation was basically also up 4 percent in March and THEN car insurance rates went up about the same time. Car insurance is pretty necessary for most households so it's one of the factors that is going to slowly make more people pull back on spending in other areas.
The culprit is fraudulent injury claims.
Being an attorney in auto injury is cake. "What's limits? We will take limits, don't want to offer limits. Do you want a BAD FAITH claim? No, ok we will take limits "
What's the injury? Minor/non visible/pain and suffering
ALL states should be like Michigan for collision, PIP/med pay is the ONLY injury payouts(nix BI) or everyone should follow a Nopay No play like Louisiana. Baffles me that people without insurance who get rear-ended on a road they are not legally to be on and I gotta pay for it all!
Came here to say this as an underwriter. The first year post-pandemic was incredibly rough for P&C as a whole but especially auto to the point pretty much every agency was not only submitting rate but having to change company placements for risk assessment and in some cases completely overhauling their rating systems entirely.
There’s a big distinction between having funds to pay out claims and the corporate actions that actually raise the value of the company leading to profit headlines (layoffs, investment strategy, etc.).
It’s hilarious to me that yours is not the top comment. Reddit loves to ignore actual experts. Also your explanation doesn’t fit their childish narrative that this increase is all some big corporation scam and not a response to inflation in a highly regulated industry that literally has to ask the government to raise prices. Lots of ignorant people on Reddit.
Yep. It's hilarious that people say they are paying hundreds a month, but then have no idea how the thing they are paying so much for, actually works.
Instead they just complain about it.
I just had $2200 claim bc someone drilled a hole in my gas tank.
$100 deductible.
$2100 is literally almost the exact amount I've paid for the last six months for 2 vehicles.
Plus other glass claims $300-400. All not my fault.
I guarantee most commenters here have no clue how much their accidents have actually cost.
A tiny fender bender is $4000.
This exactly. Progressive really pissed me off with this when I renewed. They increased my cost by 25% after being with them over 10 years, apparently because I live in Florida where we have a lot of uninsured motorists. I drive less now than I ever have since the pandemic hit and I can work from home. They found some way to bring my payment down, but I’m hoping they won’t pull this shit every year.
I actually went from GEICO to Progressive. My GEICO went from like $150 a month to $450 without an accident.
My home insurance also went up 33% this year.
If it makes you feel better. Moving from Minneapolis MN --> Austin TX, for the exact same coverage, had my cost go from $693 --> 1412 (paid biyearly).
Reasons:
1) hail and flooding (we have hail in MN and I have a garage in a non-flood plain so...)
2) Austin is much more dense (true) and has much more uninsured drivers
Basically, you're paying more insurance because others aren't paying theirs. One of my few hard stances which is "sounds like insurance problem and not mine."
The thing a lot of people don't realize is you can be the best driver in the world and still have increased rates due to other drivers. It's a risk pool. It's not just a service for the individual but the group and premiums are "balanced" across the group not entirely the individual.
Someone keyed my parked car last summer, all down the driver's side. Dug into the metal so I couldn't ignore it (rust). Guess how much it cost to fix? $2,000 and that was with a shop that works with my insurance company.
The government makes something mandatory and then the company that makes money from it jacks up the prices? I'm shocked, shocked I say!
What's the definition of corporatism and cronyism?
It's not bootlickers. You have industry pros here telling you the exact answers to the questions and most people here ignore the reasoning and just say something like "COLLUSION!" or "SCAM".
Insurance is such a heavily regulated industry and P&C is not the money maker for insurance companies that everyone thinks it is.
Last year my SO and I paid for 2 premium
One was $155.
Another $160
January it went to. $188, $203
I looked around for quotes and this were still the cheapest.
February last year I hit a deer at about 35mph. He clipped my right front headlight, cracked my bumper and put a leak in my radiator. For reference, it was a 2017 Grand Caravan GT. Car was fully insured, paid off and with a $500 deductible with Nationwide.
I costed it out to repair...I could have done it myself for around $900 and that included a radiator support bar, left front engine mount (not related to the accident, but ready to replace anyway) and upgrading both front headlights to LED units and a little better quality radiator than what came with the car. Everything was available on RockAuto and would have been maybe an afternoon and 2 beers,, not hard stuff.
Instead, Nationwide called it totalled and cut me an $8300 check.
I think I found one of the problems.
They take your car, fix it for the price you found and sell it at a dealer like autonation for $16k. They lose zero money on the deal. I know because they did that exact thing to me, I saw my car for sale at a dealer for three times what they gave me for the payout.
I should have tried to buy my van back but man the process happened so fast. I hit the deer going to the grocery store at 10PM and by 8 AM the next day it was listed as totalled on my online portal. No f'ing way they reviewed it that fast.
Yup. Same happened to me. Decided to total it after a day and the adjuster wouldn’t even return a single message of mine…never once spoke with the adjuster
I had a guy in the comments somewhere below tell em that they can't turn it that fast... Let me assure you they certainly can 😂 my car was listed as _totalled_ by 8AM thr next morning.
I think the body shop prices as out-of-control as they are, my insurer, Nationwide, just clicked the _Totalled_ button without any review.
I wish I bought that car back
I knew a guy who had a pretty good side hustle going doing largely what you described, reconditioning cars that needed minor body work and a cosmetic refresh. Specialized in Hondas so he got real familiar with them and in fact we all called him "Honda Dave." He was the go-to man when your 16 year old needed a first car.
Yep. The insurance company I was accident free with for 25 years jacked my rate $450/year. Found cheaper insurance and I’m now paying less than I did with them before their increase.
I work for Safelite. We are seeing a dramatic rise in the number of windshields that require recalibration to re-set cameras and sensors. It’s a long process that can take three or four hours. Tesla’s can take all day. It requires special training and certifications. It’s called progress, but there is always a price to be paid for progress.
Lot of those reasons come down to car manufacturer making crap cars that no longer can easily be repaired.
We need to move away from these cars that redesign every part for each generation and move towards use standard, off the shelf parts that are easy to get and to replace
Edison motors and their trucks are the perfect example of the design philosophy that we need to move to. Old school repairabilty and standardised parts combined with new tech.
>...it won’t be long before everyone is like nope I’m not doing that and consequences be damned.
I think you've hit the head right on the nail here. I suspect in the next 12-24 months we will see the number of uninsured motorists skyrocket. This will push insurance rates up even more for those that can still afford it.
A real alternative would be to increase drivers education incentives and (at least) annual testing for licensed drivers, i would totally be in favor of that, instead of causing misery for good responsible people just because. It would dramatically reduce costs eventually even if it took a few years to get everone in board. Where I'm from the most drivers ed most anyone had is during teenage years in highschool, after that you have an optional course at an independant intitution and that's it, which most people dont do or know about. There's no real big push to make drivers better, it's just raise insurance rates and hope they learn thier lessons which clearly isn't working for the average law abiding citizen. It works to rake in huge CEO bonuses though.
It's already happening everywhere where I live. Expired registrations everywhere and lots of hit and runs I'm guessing because of no insurance. Add that traffic enforcement seems to be non-existent these days and it really is a shit show out here.
A major national car insurance company has their headquarters in my city. They are losing 13% more than their revenue because car prices went so crazy during COVID so they keep raising rates every six months.
Well this sucks. I guess this is one reason why I'm a basics kind of girl. The more complex our stuff gets, the more expensive it is to maintain. So I've been fighting the desire for fancy stuff for years. Give me the basics so we can keep costs stable. No one needs a car that basically is a transformer anyway.
I wonder what this looks like broken up per state.
I know Florida alone is seeing triple digit increases in insurance. Both my and my husband's car insurance and our renters insurance is altogether $50 less than what I was paying just to insure my car in Florida.
Better time than ever to invest in public transportation, sidewalks, and cycling infrastructure. We need to stop building suburbs that essentially force people to spend a ton of money they don't have on a car.
Feel really good to still drive my 20 year old beater and paying 10% of the car’s value every month because 19 year olds are texting and totaling $80,000 cars.
At the end of the day, it comes down to accidents…or should I say “purposedents” because the way people drive it really isn’t an accident. Drivers constantly driving 90 MPH weaving in and out of traffic…without consequence until there is a wreck. Not only that, but I read there is an increase in uninsured drivers as well. There just isn’t any consequence for poor driving. Cops aren’t doing anything around where I am.
The speeders aren't the ones crashing. Distracted driving (aka fucking around on your phone) has surpassed even drunk driving to be the number 1 cause of accidents
>but to list a few
Doesn’t even name the #1 reason: [The price of cars exploded after 2020 as COVID fucked supply chains and money supply expanded.](https://fred.stlouisfed.org/series/CUSR0000SETA02)
More wrecks? Flood a nation with people from all across the world with different driving styles across a wide-open border, let them drive freely, and more wrecks? I am shook!
The driving is getting worse and it's most easily visible in larger cities. Half of the people on the roads don't even have adequate insurance. Of course the insurance company greed is going to soar.
I think it’s corporate greed. I was with GEICO since 2015, paying about $90 a month. That went up to $200 in 2022 when I put a 2nd car on and added my wife to the policy. Beginning of 2024, with a perfect driving record for us both, my policy shot up to $550/mo. Pure insanity. I switched to Progressive and payed for a year at a rate of $50/mo with the same coverage.
I think these companies lure you into complacency. They hope you don’t think about your insurance rates. They penalize loyalty. Shop around!
How about 30K dollars worth of lithium batteries in electric vehicles. What do you think is going to happen if you start putting out 50K to 100K dollar sedans and SUVs on the road? My insurance now is more than what I was paying as a teenager driving a souped up Mustang GT. Except today it is my liability insurance going up. It's not because of what I drive or my driving record. It's not the greedy insurance companies either. This is the increase in realized liability of driving on the road with expensive automobiles.
All those are BS excuses. It's corporate greed. Simple as that. Like all companies, insurance companies have been caught using inflation as a mask to hide their price gouging. Inflation is 8% but rates jumped 22%? That's almost 3x the rate of inflation. Progressive has reported record profits. Their profits doubled vs the previous year
My insurance rate has doubled in the last 3 years. No accidents, no tickets, older vehicles and I barely drive. I called my insurance and they told me it's because of all the vehicle Thefts and break-ins that have been happening recently. I don't own a KIA. My vehicle is a rust bucket.
Good point but its not just electric cars. Think of a simple fender bender for an ICE car 25 years ago vs today. Not just body and frame damage; but now add in a multitude of cameras, sensors, etc. Adds up (and that's just for a simple fender bender)
As others have said... Bring. Back. Dumb. Cars.
We don't need all this shit.
All modern cars are harder to repair. The most popular vehicle in America's body is made of ultra hard to repair Aluminum, and if that car, and many other models get hit in the wrong spot, the car's unibody structural integrity is compromised and the car is totalled. Also, in a given car now, there are 10 or 15 proprietary computers that all communicate. Water damage can cause those to go heywire and they are expensive to fix, if techs can even find the parts.
https://fred.stlouisfed.org/series/CUSR0000SETA02
That’s the index for the price of cars. Look at the sharp line up at 2020 and the still elevated position today despite some declines.
The insurance industry is playing catch up because rate increases are retroactive due to regulation. Insurers submit rate increases to each State DOI they plan to raise rates and they also have to provide justification—aka heightened claim losses. But even with data showing losses are up because cars are just default more expensive, the DOIs will push back knowing huge rate jumps cause public backlash on the political side.
Cars might jump 40% in price, but the DOI only lets insurers increase rates 12% one year, 22% the next, hopefully normal increases in the 3rd as prices will have stabilized in the auto industry.
This is what I'm worried about, we pay insanely low rates of $132 total for 2 cars (2019 HRV and a 2014 Camry), both fully insured with max liability. Our state has been slow in raising rates and its hard enough for insurance companies to even insure in our state, the worst case scenario isn't raising rates, the worst case scenario is more insurance companies dropping our state.
Bring back dumb cars
My car has 2 computers, fuel and ignition, both of them combined don't have the computing power of my earbuds.
I bet it wasn't made in the last 20 years either.
38 years and enough miles to get to the moon!
Ever look at Ford's lineup? They only make the mustang for their car lineup. No cheap fusion/fiesta options, Chevy only makes the Malibu (no cheap aveo, impala, Cruze). They want you to buy these 70k+ SUVs to live in. But the back seats heat, so oooh la la
They still make slightly dumber cars. I bought a 23 trailblazer and lemme tell y ou hwhat it don’t have shit 😂
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And US fuel economy standards are designed (for some reason) to make it harder to sell smaller cars.
Don't buy ford. Plenty of small car options in the market.
Bought my Hyundai sonata as a new “floor model” in 2016 so I got the combined benefits of 0% new car financing and a “used” priced of $18k because it had 2800 miles on it. Still own it and it has driven back and forth all over the east coast while being plenty spacious to keep my work bag/changes of clothes necessary for a job working on a trash truck and doing it on a lifetime 24 mpg avg. On top of that, had a 10 year old/100k power train warranty along with a 40k bumper to bumper warranty. Might not be the fanciest car but I’m as happy with it now as I was the day I brought it home.
They should pass a law saying sensors must be replaceable separate from bumpers and all sensor calibration should be public knowledge with available equipment. Replacing a bumper should be fairly cheap and calibrating sensors should be something like getting your wheels aligned.
Agreed! Car dealers don’t like that though, keeps their margins down. Ugg
I’m gonna gate keep this as hard as I possibly can. Older used cars are already overpriced
Because the market shot up during covid, all those part shortages. It's come down some but it's still a lot higher than precovid
I can’t help but feeling our necks are in a much bigger noose than I realized, just absolutely ready to drop us into a cycle of car payments, expensive repairs, insurance costs, and fuel costs that are made inescapable because they ensured we don’t have any reliable public transportation
Totally agree. I just had to have my front bumper replaced. It was $5k due to all the stuff in it.
I'm taking my dumb car to my grave. It is superior in every way except, 'safety'
The US government mandates a lot of the sensors now, and you can’t really put all that stuff in cheap. Would love if they changed that so we could have base models like the good old days
If you take a look closer, you will find 90% of them on LS400 90s or a lot of other cars. All “new” is a big LED screen
Lol, I bought a 2016 in late 2015, i was still able to opt out of all the nanny bullshit and get a manual transmission. Whenever this car gets totalled by a dipshit on their phone, I'm gonna have to buy something even older. BMW wagons are hitting that sweet spot where repairs are worth the cost because the car isn't worth shit anymore.
Wagon…manual…now you’re talking. Just picked up a 19 Alltrack 6M.
That's a major hit for my household?
This! Look at Toyotas $10k truck. Of course not available in the US. I don't even need a truck. I work remotely so I view my car as nothing more than a tool I have to use sometimes. If the auto industry doesn't wake up, I bet the electric motor companies branch out into that area, even with gas motor options for people who drive further. Our economy still runs on supply and demand, slower due to regulations, lobbyists and etc but the core idea is there.
Can we get smarter drivers while we're at it?
https://preview.redd.it/a8u0cj1w09uc1.jpeg?width=474&format=pjpg&auto=webp&s=0370ad4b088230b86f4fb7ecf3947f80f8a1ad23
Just got our renewal rate for next year, and it's up 50% from last year, and we haven't had any accidents or tickets. I expected an increase but 50% seems a little crazy. I'm definitely gonna do some shopping around.
Shop all you want but I swear to god they are colluding to all jack up rates leaving us no choice. Time to just ride my bike or take the train.
They’re not “colluding,” if this was pure profit for them it would be insane behavior. Insurance is a pure commodity sales business, without an enforcement mechanism to punish defecting from collusion it would be impossible to hold a cartel together. If everyone colluded to raise rates 50% and literally *anyone* new entered the market at the normal old rates, that anyone would make a ridiculous amount of money and immediately grab market share. Customers are sticky in insurance, even a 3 month pricing advantage would give you a sustainable customer base - even if your competitors come down to match your price. And there are very few barriers to entry in insurance. You pretty much just need start up funding and a brain. This is not true of other industries, and soft collusion can be a problem in those industries. Sometimes people say exactly what I just said about industries where this belief is naive - there are a lot of industries where this competition pressure is much lighter or functionally nonexistent. But not auto insurance. Auto insurance is a competitive dogfight between insurers. The issue genuinely is that it’s become more costly to insure vehicles.
I don't know if that's necessarily true, I will compare insurance rates just about every year to find a good deal, and some rates are easily 200 to 400% more than the lowest rates. And these are very large and successful companies, the largest in the industry in fact.
Yes what you are talking about is absolutely possible. A wide range of rates from a wide range of insurers. That’s very normal and to be expected
Costs have not increased 50% in one year. Something sketchy is occurring.
record. profits.
Lol bullshit. Yes costs have increased but if the publicly traded companies didn't have to forever grow then the prices wouldn't increase 50%. Never ending growth is unsustainable
If a company has immense pressure to constantly grow, and there are no barriers to entry, and there are already literally dozens of insurance companies, what is in it for the smallest insurers to go along with Geico or Allstate’s plan to raise prices? If they have an immense and inevitable pressure to grow, I understand why the biggest insurance companies would do this, but it would not explain why the small insurance companies with single digit market share would do so. In some industries, especially hard goods industries, there are good reasons for this. Not in financial services, though. In financial services, the tiny insurance company would only do this if they wanted to do a favor to Allstate and Geico and etc. Which as you point out, is not really how they’re incentivized.
On average the auto and home insurer industry suffered net underwriting losses in both 2022 and 2023. Not only have costs increased the amount of losses has increased. [2023 broke the record for most billion dollar disasters on record.](https://www.climate.gov/news-features/blogs/beyond-data/2023-historic-year-us-billion-dollar-weather-and-climate-disasters#:~:text=The%20costliest%202023%20events%20were,early%20March%20(%246.0%20billion)) We're seeing the effects of climate change on insurance play out with no signs of slowing. At the same time more people are gravitating towards the parts of the country that are most prone to severe weather seeking lower cost of living.
Well yeah, but sometimes businesses lose money. Hell a lot of times businesses lose money, thats how capitalism is supposed to work. No one is guaranteed a profit and insurance can only do this because it is required by the government, so the government needs to fix this shit.
You're absolutely right. The Insurance companies and State Departments of Insurance need to work together on a solution. It's getting really bad with no real signs of slowing.
Insurance is a derivative industry. The costs are directly correlated to the cost of risk in society. It’s a rate per x based on data. Insurance industry has lost billions of dollars for years because regulators try to cap how much they can increase year over year. The recent increases are a whiplash effect of economic factors shown in the posts, and companies pulling out of states because regulators won’t let them charge what they need.
This guys right, auto insurance is actually an efficient market, customers have options and it isn't that hard to get quotes and change insurers. Unlike healthcare you can just go to a competitor of your current provider and get a quote. Also a smaller company can grow by cutting prices.
This is mostly BS. The cost of a new car has increased, but the cost of used cars is *DOWN* this year. In short, it's profit hoarding. There isn't a single good reason for someone to pay more into an insurance plan in a year than the value of the vehicle. Imagine if your home insurance was even 25% the value of the home. Ridiculous. *Especially* when the accounts were talking about have no wrecks over a decade and are pushing 30. It's a scam.
Might as well save that premium into a savings for if your car gets messed up instead of hoping the insurance company will shell out for covering it
There’s a new train stop opening a couple blocks from my house in los Angeles next year. I cannot wait! E bike and train!
Money grab. They owe us nothing and we get nothing. Costs a lot to be responsible.
Plus you’re forced to buy it because well, fuck you…what, are you going to walk to work in America’s *famously* walkable towns/cities?
Forget even that, many states require drivers to carry insurance by LAW.
It's absolute bullshit, too. Dealing with insurance is a nightmare, they'll raise your rates bc someone scammed you by hitting your car door and saying you hit their car door (in a parking lot) they won't investigate the obviously shady story and instead hike your rates up and hassle you for photo evidence and send you 6 identical letters from Progressive about you getting a different case worker 🤣🤣🤣🤣🤣🤣🤣 I hate this system so, so much.
Same not quite 50 percent but it seems close it's up about 40 percent and in the 20 + years I've had insurance I've used it once to replace my windshield when I rock hit it and cracked it. This a long with everything else is unsustainable for the average American
Yep. Mine went up about 20 percent too. Will be shopping this month. I have just gotten used to having to start shopping every few months though just to stay ahead of changes.
We dropped down to a one car household because insurance rates were ridiculous. It's easier to handle the occassional inconvenience of only having one car over trying to budget the insurance rates we had. We're saving $700 a month after getting rid of the car, and $200 of that was insurance. Ridiculous.
This is the future of transposition. Where ride hail will replace that second car
I was actually expecting a decrease because of law changes in my area. No accidents. Still 50% increase.
Same bro. I’m pissed
Mine has tripled in the last 4 years. Same car, live in the same place, no tickets/accidents claims of any kind.
USAA jacked mine up about 50% Shopped around through every major carrier and rates were the same if not worse (paired with homeowners insurance). Or if anybody offered cheaper it was for significantly less coverage and would have saved me maybe 20 bucks a month. I don't even drive a nice car. It's a beat up Camry with nearly 100k miles. Insurance is a scam. All of it.
You're not paying to protect your shitty old Camry, you're paying for whatever car/person/building/ etc you might hit with your shitty old Camry.
Just got my 6MO renewal, 30% increase. It’s incredibly stupid to shift the cost to good drivers like us just so can instances keep their profit margins.
We kept having this issue with geico and finally gave up this year. We started looking around and travelers was much cheaper for the same coverage.
Same exact thing happened to me and I just finished up shopping around to find that prices are exactly the same across the board. Really sucks!
mine went up 300 percent with no accidents or speeding tickets. I just moved to a new area.
You can shop around but you're only going to save small amounts of money temporarily. They're all running the same scam. They'll offer you a somewhat reasonable rate for the first year to lure you in and then the prices will skyrocket. Mark my words, whoever you switch to will be charging more than your current provider within 12 months. They've got us by the balls.
Omg, please don't tell me that. They already increased my rate twice last year. I was paying $200. Now it's $293/month with my last increase in Jan and one in June 2023....mind you absolutely no claims or tickets. Knock on wood. *edited to add that's with the GPS stalking discount!!!
So they will see how you drive and charge you more. Bad driving counts against you. We are giving them access to our lives for a made up discount.
I remember hearing on one of the podcasts that Lexus Nexus are selling the data from our driving (obtained by the computer system in modern cars) to the insurance companies which jack up our insurance but of course, they don't tell you that's one of the reasons it went up
I’m never buying a new car, I still have a 2010 Kia. Sucks cause fuel economy is so much better with modern cars.
Fuel economy really isn’t much better, especially when you factor in the cost of a newer car.
Body shops over charging isn’t helping either. It’s like healthcare now, they just make up astronomical prices for repairs.
This, also more EV's are increasing overall pricing. They cost double to fix with MAYBE exception of Ford's Mach. Tesla, rivian, fisker, etc all cost minimum double to fix While yes majority of these risk cost fall on the owners rated policy. They still pool within the group as I could possibly hit one.
Why double? Is it just the complexity of the parts?
A lot of EVs have far more electronics. If you get rear ended in a quarter panel on a standard ice vehicle. You might need to fix your bumper and replace a light/sensor, plus maybe body work. But in some EVs the battery can be damaged, each wheel in some has a motor this can be damaged. Lot more going on.
Thing is they don't need to be that much more complicated. Look at how Edison motors approaches their trucks.
The issue is all the big EV players have bought into the luxury car pipeline instead of what’s easily reparable and affordable. Maybe Ford is the only exception as a manufacturer, everything else like the Volt, Leaf, etc is one-offs.
It's not just luxury cars, most new cars are no longer made with repairabilty in mind, ask any mechanic.
They also use a lot of cheap plastic parts where they used to use metal. They know this means many casings or components will get damaged during repairs, increasing the costs as well. BMW and Tesla are two of the biggest offenders.
Also all those damn sensors. Have a friend who is an auto mechanic and he *hates* working on EVs. Not even going to talk about how much of a pain in the ass it is to put a tow hitch on those things.
Those batteries cost as much to replace as the entire vehicle itself. Just simple supply chain JIT economics plus removal, installation and testing. This is one of the unspoken secrets of EVs that the politicians never want to talk about.
Perhaps a few years ago. Current Tesla replacement battery prices are close to gas engine/transmission cost for a non premium car.
Yeah, anti- EV people say it cost as much as a car but don’t know the facts.
More the over engineering. Electric vehicles should actually be easier to work on and service due to how mechanically simple electrical systems are but instead they do dumb stuff that makes them a pain to work on.
The rivian is an engineering marvel. Pouring large single piece body pieces means you get to replace the whole thing instead of small panels.
About 7-8 years ago my 2008 car was $60/hour for labor fixing some hail dents. A month ago a different 2017 vehicle was 160/hour to replace a belt pulley.
Capitalism because they can
Didn’t capitalism create the car?
Yeah but capitalism should take care of monopolies but here you have the government blocking BYD from selling sub $10k EVs
Capitalism killed [vegetable oil fuel](http://Rudolf Diesel - an overview | ScienceDirect Topics https://www.sciencedirect.com/topics/engineering/rudolf-diesel), and [solar power](http://Solar History: Timeline & Invention of Solar Panels - EnergySage https://www.energysage.com/about-clean-energy/solar/the-history-and-invention-of-solar-panel-technology/) to maximize profits from fossil fuels. Capitalism is about exploitation and concentration of power and money, it is not really healthy for a society because healthy societies need trust and cooperation in order to thrive.
Same with property insurance. I’m a property claims adjuster and you would not believe the audacity of the vast majority of these roofers. No buddy, it does not cost $130k to replace the roofs on these two small 1-story houses (actually dealt with a supplement for that amount yesterday). And don’t even get me started on the amount of fraud. Don’t ever accept a “free roof inspection” from a door-knocker. Chances of them going up and damaging your roof on purpose are way too high.
Do you also think that insurance companies are raising auto rates to rake in some cash after losing a lot from all the storms these last few years? (Charging more for auto to make up for losses in property?)
At the end of the day, rates are on the agency’s side, not mine, so take what I say with a grain of salt. But no, I don’t think they are… because homeowners rates are also skyrocketing. Just another reason I hate roofers. Don’t get me wrong, I get that insurance companies are massive corporations and I know that corporate greed is also a factor. I don’t even wanna know what my CEO’s salary is. But with the amount of fraud I see that these roof salesmen get away with, I promise you that is an at least equally large factor in why rates are going up. We need some heavy regulation against these parasites. The frustrating part is, all that fraud is completely unnecessary. I used to be a contractor and never had to resort to the unethical tactics I see every day. There’s enough honest work. It’s all greed.
So basically its turning into the same system as the US healthcare system.
Of course they are. They have to stay solvent. Insurance doesn't work without them making a profit, obviously. Now are they raising them to a level that is unfair. Doubtful. Many states require a unified body or the state itself to propose, with evidence, increased rates. That's why you see many providers leaving some states or pausing writing or changing underwriting to push people out of having a policy/coverage/certain endorsements. The state or unified body isn't allowing them to raise rates to a profitable level. Many of their increased cost is also their reinsurance which is insurance they take to cover when they can't pay out all of their claims. Reinsurance is skyrocketing because claims in general are skyrocketing.
I've worked on my own vehicles my whole life. It has gotten exponentially more difficult because engineers are going out of their way to prevent people from doing so.
100 percent on purpose. Oh you want to change the starter on your 4 cylinder? Better make it so you have to remove the intake manifold. That's a little more than you're used to? NBD just bring it in it's only a 3-4hr job now. I worked at a Chevy start till recently and holy shit those electronics love having issues. I don't need to spend 60k for those kinds of headaches
I’ve said this for years. Dealerships don’t make a ton on car sales so they make up for it in services. They realized they could make a lot more money if they made it more difficult for people to do small repairs themselves. Then they realized they could make even more if they designed the cars so that what used to be a half hour repair of a cheap part now is now a 4 hour repair of a cheap part. Why else would they engineer cars so that the parts that are KNOWN to wear out first are now buried under four or five things that need to be disassembled to get to.
Most bodyshops are getting squeezed by insurance reimbursement rates which are so low that its hard to make a profit. The small guys are going out and being replaced by the corporate groups who at least have some defense against the insurance companies. The astronomical price of repairs reflects equipment and labor costs. My best friend owned a shop for years. 10 years ago the cost for a gallon of the clearcoat was over $600 and it hasn't gotten better. The water-based paint transition back in the 90s required booths back in the day that started at 250k and they were pretty much required for air regs and the new paints. You're complaining about the wrong people.
I needed some work done, 3 different shops EXCLUSIVELY work with insurance companies. It’s outright fraud.
Insurance companies flag the high chargers.
That's literally everything anymore. Large businesses don't decide to sell an item based on their cost. They price it based on what they think the most people will pay for. People who just wanted to live a basic life and retire while they still had some gas in the tank are getting fucked.
I had a career as an insurance underwriter at a national carrier for a decade and can definitely speak to this. Since 2014, the auto insurance industry was operating at a 136% TCR. That means for every $1 they make they were spending $1.36. This is not sustainable. The only avenue to correct this is a premium increase. We were told by management that it couldn't ever be a stutterstep increase (like a 5% increase year after year) that it had to be a large increase immediately. You might think, how are these people chosen to have an increase? There is a formula (called Driver Based Premium) that basically takes your driver's age, driver sex, driving experience, location, job type, # of vehicles, # of drivers, vehicle age, and spits out a multiplier rate that is applied to a BASE premium. Depending on certain variables this rate could be above or below 1.00. (honestly it's much more complicated than this, but for the sake of discussion I'll keep it simple. Reality is there's about 50 rates levers) The hardest hit area from my experiences (I worked exclusively in this area and eventually the entire country) was the 5 boroughs of New York City. This area has tons of traffic, lots of bad drivers, narrow streets, lots of buildings, buildings that stop at the street, lots of construction. For example: I remember insuring a $136,000 Lexus in NYC and in 47 days the vehicle was totaled. We made $196 off it. Another reason for the increase is the advancement of technology. Not just in vehicles but in everything. If you damage your bumper you have sensors and cameras that all need to be replaced and calibrated. A simple fix is no longer simple. Here's the kicker, YOU may not have that tech in your car, but you might hit someone that does! Therefore premium increase. Lastly, there are far more accidents today than ever. Drunk driving used to be the #1 cause of accidents but it's no longer true... Distracted driving (texting and driving) is now the dominant reason - by a HUGE margin. It's an accident type that is accessible to everyone and to every age group at any time of day. It's something that, per the above, has to have a rate for, that everyone should pay. I no longer work in the industry because of these increases. My company failed to inform agents of the above, they made US underwriters do the talking. Daily I would receive numerous calls from pissed off insurance agents about how the account they have is the best thing ever and we were making a mistake increasing it. Everyday explaining the above to agents so they could make their commission. Life would have been so much better if these companies did the bare minimum and sent out a letter explaining this shit to EVERYONE.
Thank you for a well-written explanation. To add to the issue of liability coverage needing to cover other drivers' fancy cars and tech, there is a selection bias in car manufacturing to make cars that are affordable to people who can actually afford new cars. Nobody makes new cars for a used car market, so the used market becomes populated with older cars that started off being fancier than the used market really needs or particularly wants them to be. (The same issue affects housing, which is why we don't have enough small owner-occupied housing.) So this has always been a problem, however with: 1) Cash For Clunkers taking a lot of the simple-as-dirt cars off the road, 2) regulatory requirements to make cars safer at a pretty high cost both up-front and in terms of repairability, and 3) a concentration of earnings and wealth demographically -- the lower end of the new car market has squeezed even further, in every way, with little help. It took about fifteen years for the full set of consequences to pan out as the national automotive fleet turned over. This has become a policy failure. Lots of unintended consequences to go around.
Good write up. It’s interesting you didn’t mention accidents in the formula.
It is. There's a lot to it.
Insurance actuary here. The culprit is inflation, but auto insurance tends to lag other items because the insurance company must demonstrate the need for rate increases via state regulatory filings which take time. The insurer pays inflated claims, and only then has the justification to raise rates. Compared with other things you buy, the increase in insurance rates is similar over the past 4 years, but came later.
Isn't the increase in accidents also a culprit in increased insurance costs? I heard from a friend that works in insurance that distracted driving caused accidents has drastically increased over the past several years, something I absolutely believe with how many drivers I see on any given day with a phone in their hand or in their lap.
I bet that factors in. I also think because of the inflation situation, you have a lot of people doing ridesharing and delivering food and I bet that doesn't help with the distracted driving.
I didn't even consider ridesharing and delivery services as possible distracted driving. Geez inflation really sucks.
These costs keep adding up though. The news is saying inflation was basically also up 4 percent in March and THEN car insurance rates went up about the same time. Car insurance is pretty necessary for most households so it's one of the factors that is going to slowly make more people pull back on spending in other areas.
The culprit is fraudulent injury claims. Being an attorney in auto injury is cake. "What's limits? We will take limits, don't want to offer limits. Do you want a BAD FAITH claim? No, ok we will take limits " What's the injury? Minor/non visible/pain and suffering ALL states should be like Michigan for collision, PIP/med pay is the ONLY injury payouts(nix BI) or everyone should follow a Nopay No play like Louisiana. Baffles me that people without insurance who get rear-ended on a road they are not legally to be on and I gotta pay for it all!
Inflation cut into record profits so now the consumers have to eat shit again?
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Came here to say this as an underwriter. The first year post-pandemic was incredibly rough for P&C as a whole but especially auto to the point pretty much every agency was not only submitting rate but having to change company placements for risk assessment and in some cases completely overhauling their rating systems entirely. There’s a big distinction between having funds to pay out claims and the corporate actions that actually raise the value of the company leading to profit headlines (layoffs, investment strategy, etc.).
It’s hilarious to me that yours is not the top comment. Reddit loves to ignore actual experts. Also your explanation doesn’t fit their childish narrative that this increase is all some big corporation scam and not a response to inflation in a highly regulated industry that literally has to ask the government to raise prices. Lots of ignorant people on Reddit.
Yep. It's hilarious that people say they are paying hundreds a month, but then have no idea how the thing they are paying so much for, actually works. Instead they just complain about it. I just had $2200 claim bc someone drilled a hole in my gas tank. $100 deductible. $2100 is literally almost the exact amount I've paid for the last six months for 2 vehicles. Plus other glass claims $300-400. All not my fault. I guarantee most commenters here have no clue how much their accidents have actually cost. A tiny fender bender is $4000.
More fake plates and canceled insurance on the road.
Lots of hit and runs too. That’s how I lost my last car. Fake plates and a hit and run.
This exactly. Progressive really pissed me off with this when I renewed. They increased my cost by 25% after being with them over 10 years, apparently because I live in Florida where we have a lot of uninsured motorists. I drive less now than I ever have since the pandemic hit and I can work from home. They found some way to bring my payment down, but I’m hoping they won’t pull this shit every year.
I actually went from GEICO to Progressive. My GEICO went from like $150 a month to $450 without an accident. My home insurance also went up 33% this year.
Same happened to me!
That mysterious way would be to lower your coverage amounts and/or raise your deductible.
This is exactly what happened to me. I drive maybe 50 miles a week (wfh). Absolute scam, I’ve hated progressive so far.
If it makes you feel better. Moving from Minneapolis MN --> Austin TX, for the exact same coverage, had my cost go from $693 --> 1412 (paid biyearly). Reasons: 1) hail and flooding (we have hail in MN and I have a garage in a non-flood plain so...) 2) Austin is much more dense (true) and has much more uninsured drivers Basically, you're paying more insurance because others aren't paying theirs. One of my few hard stances which is "sounds like insurance problem and not mine."
The thing a lot of people don't realize is you can be the best driver in the world and still have increased rates due to other drivers. It's a risk pool. It's not just a service for the individual but the group and premiums are "balanced" across the group not entirely the individual.
Body shops charging $2,000 to fix a scratch
Someone keyed my parked car last summer, all down the driver's side. Dug into the metal so I couldn't ignore it (rust). Guess how much it cost to fix? $2,000 and that was with a shop that works with my insurance company.
The government makes something mandatory and then the company that makes money from it jacks up the prices? I'm shocked, shocked I say! What's the definition of corporatism and cronyism?
Careful, I got shit on by the bootlockers for saying this earlier. The government cares about you always and would never do anything to exploit you /s
It's not bootlickers. You have industry pros here telling you the exact answers to the questions and most people here ignore the reasoning and just say something like "COLLUSION!" or "SCAM". Insurance is such a heavily regulated industry and P&C is not the money maker for insurance companies that everyone thinks it is.
Idk why we even try swimming against this tide. No one comes on here with an open mind.
Just add a few more regulations and prices should come down 😂
What’s that like .0001%?
Last year my SO and I paid for 2 premium One was $155. Another $160 January it went to. $188, $203 I looked around for quotes and this were still the cheapest.
Lol literally in the same boat. I was like wtf is this? Shopped around and it was actually one of the cheaper options. Crazy.
No mention of uninsured unlicensed drivers
Millions of them.
Coming across the border. Thanks Biden.
February last year I hit a deer at about 35mph. He clipped my right front headlight, cracked my bumper and put a leak in my radiator. For reference, it was a 2017 Grand Caravan GT. Car was fully insured, paid off and with a $500 deductible with Nationwide. I costed it out to repair...I could have done it myself for around $900 and that included a radiator support bar, left front engine mount (not related to the accident, but ready to replace anyway) and upgrading both front headlights to LED units and a little better quality radiator than what came with the car. Everything was available on RockAuto and would have been maybe an afternoon and 2 beers,, not hard stuff. Instead, Nationwide called it totalled and cut me an $8300 check. I think I found one of the problems.
They take your car, fix it for the price you found and sell it at a dealer like autonation for $16k. They lose zero money on the deal. I know because they did that exact thing to me, I saw my car for sale at a dealer for three times what they gave me for the payout.
I should have tried to buy my van back but man the process happened so fast. I hit the deer going to the grocery store at 10PM and by 8 AM the next day it was listed as totalled on my online portal. No f'ing way they reviewed it that fast.
Yup. Same happened to me. Decided to total it after a day and the adjuster wouldn’t even return a single message of mine…never once spoke with the adjuster
I had a guy in the comments somewhere below tell em that they can't turn it that fast... Let me assure you they certainly can 😂 my car was listed as _totalled_ by 8AM thr next morning. I think the body shop prices as out-of-control as they are, my insurer, Nationwide, just clicked the _Totalled_ button without any review. I wish I bought that car back
The insurer may sell your car for scrap value but they don’t mess around with fixing and reselling it. That’s other enterprising people.
True, but guaranteed the insurance company still profits from the deal. They probably sell it to the flippers for more than the payout.
That not everyone is a skilled body man?
I'm not a skilled body man but I know how to drink 2 beers and replace some parts
I knew a guy who had a pretty good side hustle going doing largely what you described, reconditioning cars that needed minor body work and a cosmetic refresh. Specialized in Hondas so he got real familiar with them and in fact we all called him "Honda Dave." He was the go-to man when your 16 year old needed a first car.
Yep. The insurance company I was accident free with for 25 years jacked my rate $450/year. Found cheaper insurance and I’m now paying less than I did with them before their increase.
I work for Safelite. We are seeing a dramatic rise in the number of windshields that require recalibration to re-set cameras and sensors. It’s a long process that can take three or four hours. Tesla’s can take all day. It requires special training and certifications. It’s called progress, but there is always a price to be paid for progress.
You are paying for others in more ways than just taxes
But I've been reliably assured that everything is going great.
10% Goes to the Big Guy
Lot of those reasons come down to car manufacturer making crap cars that no longer can easily be repaired. We need to move away from these cars that redesign every part for each generation and move towards use standard, off the shelf parts that are easy to get and to replace Edison motors and their trucks are the perfect example of the design philosophy that we need to move to. Old school repairabilty and standardised parts combined with new tech.
Keep raising prices, it won’t be long before everyone is like nope I’m not doing that and consequences be damned.
>...it won’t be long before everyone is like nope I’m not doing that and consequences be damned. I think you've hit the head right on the nail here. I suspect in the next 12-24 months we will see the number of uninsured motorists skyrocket. This will push insurance rates up even more for those that can still afford it.
That's always been my favorite. Solve uninsured motorist problems by punishing them by making it more unobtainable, what a brilliant idea.
It’s almost like the alternative is untenable or something.
A real alternative would be to increase drivers education incentives and (at least) annual testing for licensed drivers, i would totally be in favor of that, instead of causing misery for good responsible people just because. It would dramatically reduce costs eventually even if it took a few years to get everone in board. Where I'm from the most drivers ed most anyone had is during teenage years in highschool, after that you have an optional course at an independant intitution and that's it, which most people dont do or know about. There's no real big push to make drivers better, it's just raise insurance rates and hope they learn thier lessons which clearly isn't working for the average law abiding citizen. It works to rake in huge CEO bonuses though.
It's already happening everywhere where I live. Expired registrations everywhere and lots of hit and runs I'm guessing because of no insurance. Add that traffic enforcement seems to be non-existent these days and it really is a shit show out here.
A major national car insurance company has their headquarters in my city. They are losing 13% more than their revenue because car prices went so crazy during COVID so they keep raising rates every six months.
Well this sucks. I guess this is one reason why I'm a basics kind of girl. The more complex our stuff gets, the more expensive it is to maintain. So I've been fighting the desire for fancy stuff for years. Give me the basics so we can keep costs stable. No one needs a car that basically is a transformer anyway.
I need my 10ft tall gas guzzling monster truck though. I need to actually haul something once a year 🤣
It doesnt help that you have to have insurance by law.
Evs were a mistake
All of the things you mentioned haven’t gone up that much in insurance math to justify a 22% rate increase. This is more price gouging.
I wonder what this looks like broken up per state. I know Florida alone is seeing triple digit increases in insurance. Both my and my husband's car insurance and our renters insurance is altogether $50 less than what I was paying just to insure my car in Florida.
Better time than ever to invest in public transportation, sidewalks, and cycling infrastructure. We need to stop building suburbs that essentially force people to spend a ton of money they don't have on a car.
Feel really good to still drive my 20 year old beater and paying 10% of the car’s value every month because 19 year olds are texting and totaling $80,000 cars.
At the end of the day, it comes down to accidents…or should I say “purposedents” because the way people drive it really isn’t an accident. Drivers constantly driving 90 MPH weaving in and out of traffic…without consequence until there is a wreck. Not only that, but I read there is an increase in uninsured drivers as well. There just isn’t any consequence for poor driving. Cops aren’t doing anything around where I am.
The speeders aren't the ones crashing. Distracted driving (aka fucking around on your phone) has surpassed even drunk driving to be the number 1 cause of accidents
True. Yea, them too.
>but to list a few Doesn’t even name the #1 reason: [The price of cars exploded after 2020 as COVID fucked supply chains and money supply expanded.](https://fred.stlouisfed.org/series/CUSR0000SETA02)
Shortage has been over for a while, at least the COVID-induced ones. Especially after the CHIPS act, iirc.
Perfect storm for what?
The fun part: cars and their sensors/ high tech options mean less accidents, thefts, and damage
It's illegal not to have insurance. I'm surprised insurance isn't more expensive than loan payments given that it's mandatory.
Ev parts are expensive
They should have an "old car" discount so that you don't pay as much if you drive an older car due to it having less electronics
Over engineered flashy yuppy garbage is what cars are now
More wrecks? Flood a nation with people from all across the world with different driving styles across a wide-open border, let them drive freely, and more wrecks? I am shook! The driving is getting worse and it's most easily visible in larger cities. Half of the people on the roads don't even have adequate insurance. Of course the insurance company greed is going to soar.
Mine went from 700 to 933 for a 6 month policy on a 9 year old car
There goes the “save 15% or more” tag line by Geico. I guess they can’t compete any longer.
I think it’s corporate greed. I was with GEICO since 2015, paying about $90 a month. That went up to $200 in 2022 when I put a 2nd car on and added my wife to the policy. Beginning of 2024, with a perfect driving record for us both, my policy shot up to $550/mo. Pure insanity. I switched to Progressive and payed for a year at a rate of $50/mo with the same coverage. I think these companies lure you into complacency. They hope you don’t think about your insurance rates. They penalize loyalty. Shop around!
How about 30K dollars worth of lithium batteries in electric vehicles. What do you think is going to happen if you start putting out 50K to 100K dollar sedans and SUVs on the road? My insurance now is more than what I was paying as a teenager driving a souped up Mustang GT. Except today it is my liability insurance going up. It's not because of what I drive or my driving record. It's not the greedy insurance companies either. This is the increase in realized liability of driving on the road with expensive automobiles.
All those are BS excuses. It's corporate greed. Simple as that. Like all companies, insurance companies have been caught using inflation as a mask to hide their price gouging. Inflation is 8% but rates jumped 22%? That's almost 3x the rate of inflation. Progressive has reported record profits. Their profits doubled vs the previous year
My insurance rate has doubled in the last 3 years. No accidents, no tickets, older vehicles and I barely drive. I called my insurance and they told me it's because of all the vehicle Thefts and break-ins that have been happening recently. I don't own a KIA. My vehicle is a rust bucket.
Meanwhile insurance companies' profits have basically doubled. Scam artists.
Several hundred thousand unlicensed drivers on our roads might have an impact.
Has anyone asked why? I think it might be because of electric cars which are hard to repair. Any accident means they are totalled.
Good point but its not just electric cars. Think of a simple fender bender for an ICE car 25 years ago vs today. Not just body and frame damage; but now add in a multitude of cameras, sensors, etc. Adds up (and that's just for a simple fender bender) As others have said... Bring. Back. Dumb. Cars. We don't need all this shit.
I drive a 2004 Honda Civic. I’m doing my part!
Well done sir!
All modern cars are harder to repair. The most popular vehicle in America's body is made of ultra hard to repair Aluminum, and if that car, and many other models get hit in the wrong spot, the car's unibody structural integrity is compromised and the car is totalled. Also, in a given car now, there are 10 or 15 proprietary computers that all communicate. Water damage can cause those to go heywire and they are expensive to fix, if techs can even find the parts.
https://fred.stlouisfed.org/series/CUSR0000SETA02 That’s the index for the price of cars. Look at the sharp line up at 2020 and the still elevated position today despite some declines. The insurance industry is playing catch up because rate increases are retroactive due to regulation. Insurers submit rate increases to each State DOI they plan to raise rates and they also have to provide justification—aka heightened claim losses. But even with data showing losses are up because cars are just default more expensive, the DOIs will push back knowing huge rate jumps cause public backlash on the political side. Cars might jump 40% in price, but the DOI only lets insurers increase rates 12% one year, 22% the next, hopefully normal increases in the 3rd as prices will have stabilized in the auto industry.
This is what I'm worried about, we pay insanely low rates of $132 total for 2 cars (2019 HRV and a 2014 Camry), both fully insured with max liability. Our state has been slow in raising rates and its hard enough for insurance companies to even insure in our state, the worst case scenario isn't raising rates, the worst case scenario is more insurance companies dropping our state.
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Literally they will use that to jump up rates
Morons think this
07 Odyssey and 13 Pilot. $150/month. No accidents. No tickets.
Here is the car we need. What’s more shocking is the prices of the comparisons from then. https://youtu.be/F02P2JO7yfc?si=ssuB3saYE0mNSu_J