Experts predict see car insurance rates increase by at least 8.4 percent This year goes back to January and, at least for the nation’s two largest auto insurers, rates rose as much or more in the first quarter alone. And more rate hikes are on the way.
While Inflation is slowing down, the customer complaint rate is zero. Insurers got away with fewer claims (and record profits) during the COVID-19 lockdown when traffic was light and small bends – the most common insurance claim – less. Now, driving is close to or back to pre-pandemic levels. Auto parts repair prices are still high and often backlogged, leaving many customers to rely on insurance-provided rentals.
And then there’s the dramatic rise in catastrophic claims, both for autos and for homeowners insurance. Thanks to unprecedented flood and strong storms in the cities all over the USFor example, Allstate saw disaster costs increase by more than a billion dollars in the first quarter compared with last year. An executive of Allstate said the rate will go up “until we get back to historic returns,” based on The Wall Street Journal.
Not the only insurance company in trouble this year.
Progressive shares fell 2.5% on Wednesday, following the release of a quarterly shareholder letter in which executives revealed a reduction in advertising costs for the company, known for its broad marketing. There’s often “Flo,” a fictional salesman.
Tricia Griffith, Progressive’s chief executive officer, said the move, which comes with a premium increase, is not intended to bring growth “to a halt”. Any impact will depend on how rivals also adjust their prices in the face of inflation.
Ms Griffith said in her letter that Progressive intends to “aggressively raise rates” and that the increase will be higher than premiums rising more than 13% in 2022 and an additional 4% in the first quarter.
The company needs to raise prices “about 10 more points this year to catch up and stay ahead of the curve” on higher costs in claims for private passenger vehicles, she told analysts. in the call. She said the increase requested could range from 8% to 12%.
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Last month, Travelers Cos said it increased its car insurance rate to 14% on renewal policies in the first quarter. One executive said the company expects the number “to be slightly higher than this for the rest of 2023.”
And that’s if you can even afford the car in the first place. Toyota is predicting the average price of a new car sale can reach $50,000 at the end of the year. New car average payment hit one Incredible $777 at the beginning of this yearAnd Used car prices continue to climb also.
