If they don’t get you coming, they get you going. It’s the fate of the hard-working American that, just as cars are becoming more affordable, higher interest rates hit. And then, as automakers adjust prices down and offer better financing deals, insurance skyrockets. That’s right, we’re talking about insurance today. Get excited about getting depressed.
Actually, first, we’re going to talk about all the factors that should be making new cars more affordable just to show how much this sucks. Right off the bat, new vehicle inventory continues to climb and is getting closer to pre-COVID levels with a reasonable supply. Are you worried that the container ship that hit a Baltimore bridge is going to screw up supply? You probably don’t need to worry.
High interest rates are not ideal, sure, but credit availability is slowly improving and a lot of that comes from automaker finance companies currently offering better financing deals.
It’s all pretty much good news until you get to the damn insurance, which is going up for understandable reasons and also some questionable ones.
There Are So Many Cars
Here’s the first piece of good news. We have more cars. As covered in my Trimflation article, a short supply leads initially to higher prices due to scarcity and then a secondary worsening of affordability due to automakers building higher margin/more expensive vehicles. I plan to do a follow-up later this year to see where trimflation stands a year after identifying the condition as I’m not entirely convinced that automakers are suddenly pushing out a lot of cheaper cars, but current data seems to suggest the situation has improved.
Even if automakers are building fewer lightly optioned cars, the increase in the supply of vehicles means that incentives are on the rise and dealers might therefore be selling higher optioned vehicles for lower prices, which is a win for consumers.
Where do we stand at the moment? There are a lot of cars.
Cox Automotive tracks these things and there’s an Automotive News piece this morning that explores those numbers:
Cox said inventory stood at 2,837,400 in its latest estimate, a 74-day supply, up slightly from the previous month. A year earlier, it was 1.9 million vehicles, a 35 percent year-over-year increase, Cox said.
Cox said inventory varied greatly based on sticker price. Vehicles that were $30,000 to $40,000 had the tightest supplies, at 59 days, while the supply of vehicles priced under $20,000 stood at 66 days. Vehicles between $20,000 and $30,000 had a 67-day supply, Cox said. Supply was greatest among vehicles in the $60,000 to $80,000 range at 98 days, down slightly from the previous month.
To put this in context, A 60-day supply is largely considered to be a healthy market supply. Anything under 60 days shows some mix of limited supply or strong demand (or both). Toyota is regularly under 60 days as people love buying Toyotas and the company can barely make them fast enough to satiate America’s demand for RAV4s.
Being at a 74-day supply overall shows there are deals to be had, but it isn’t such a big number that it should cause an immediate panic. It’s also good news that the under $20k car isn’t entirely extinct, just endangered, with vehicle supply at 66 days.
Again, the industry is catching up to its pre-COVID supply levels and interest rates and other factors are still keeping some people on the sideline (more on that soon).
Baltimore Bridge Accident Shouldn’t Hamper Car Supply For Too Long
The collision of a container ship with the Francis Scott Key Bridge in Baltimore last month was an awful tragedy and one, I sense we’ll find out, was probably avoidable. The fact that the bridge sits across the Port of Baltimore, a key shipping location for vehicles, initially created a lot of concern that this might screw with our rising supply of new cars.
This concern was bolstered by the fact that Baltimore is by far the largest port in the United States when it comes to vehicle trade, covering about 15% of the total trade.
Thankfully, this ultimately doesn’t seem to be a big issue as other nearby ports are capable of absorbing the traffic and the port is only a small piece of the car parts trade according to an S&P Global Mobility analysis:
The level of disruption caused to vehicle shipments by Baltimore’s shutdown is expected to be minimalized by a multitude of other options being available to vehicle companies wanting to route their vehicles to the US’ east coast. Brunswick; Newark, NJ; and Philadelphia all provide viable alternatives.
Further hope that supply chain disruption will be minimal is provided by diving into Panjiva’s data on motor vehicle parts (HS 8708 for those interested). Examining the trade data for a one-week period in January 2024 reveals that Baltimore is a much less significant player when it comes to original equipment (OE) and aftermarket parts. Here, Baltimore sits 15th in the list of US ports and had just a 1.1% share of motor part traffic in the week.
Again, more good news. Or, at least, not more bad news.
Credit Availability Improves Slightly
I’ve staked a bet on the industry being able to sell more than 16 million passenger cars in the United States in 2024, partially on lower interest rates. I should clarify, because it came up in the comments, that I’m not necessarily arguing for a return to the super lower interest rate environment we were in and, frankly, I agree with those who say interest rates staying on the higher side is ultimately a good thing as it gives the Fed wiggle room to jumpstart the economy if something goes wrong.
All that being said, I do think there’s a case for rates eventually coming down (even if not in June) a bit to give consumers relief. I don’t have to make those decisions, thankfully.
According to Cox Automotive, the availability of credit improved again for the second straight month:
Credit availability has improved for two consecutive months and rose 1.1% month over month with the arrival of spring. Still, credit access remains tighter than a year ago in all channels and most lender types, except loans from auto finance companies.
I think that bit about “auto finance companies” is the key here. If you want to finance a loan outside of a dealer it’s going to be tough unless you have a good credit union or some other way of financing a car at an attractive rate.
This is why low APR offers from companies like Mazda and Volkswagen seem to be paying off for those automakers. So, again, this is decent news. The overall car financing picture isn’t perfect, but there’s credit out there if you’re willing to go to certain automakers.
Auto Insurance Rates Are Going Up And Are Not Slowing Down
Yup, the thing that’s gonna super suck about buying a new car right now is that your insurance rates are going to probably go up a bunch. In fact, they already have. Looking at this graph from the U.S. Bureau of Labor Statistics, you can see a little decrease in 2020 when we all stopped driving, and then a rapid increase.
Why is this happening? The American Property Casualty Insurance Association has some thoughts:
The answer is for the simple reason that the cost of the things auto insurance pays for has been rising faster than premiums. This is exacerbated by inflation trends, legal system abuse, and in some states, regulatory uncertainty.
In 2022, auto claim losses and expenses spiked to more than $1.12 for every $1 in premium.
Some of the key contributors to rising costs include cumulative years of record-high inflation that have greatly increased the cost of repairing and replacing cars. Over the last five years, the cost of car parts and used cars and trucks increased nearly 40 percent and the cost of vehicle repairs increased by more than 20 percent. Other key cost drivers include higher numbers of car thefts and more complex and expensive repairs due to the increasing sophistication of the technology in today’s vehicles.
Dangerous driving behaviors are also having an impact on costs. As daily driving patterns and traffic volumes rebound from pandemic lows, traffic fatalities remain alarmingly high.
All of this is true. Cars are getting more expensive to repair, drivers are getting worse, and road design in this country is despicably bad. Add onto that a lack of good automotive technicians and now insurance companies are paying more to keep customers in rental cars while they wait for repairs.
And to make things more exciting, let’s just take a look at the Colorado State University forecast for hurricane activity this year:
Ahhhh fudge.
Insurance companies are crying poor because that’s what insurance companies do so they can raise rates, but the underwriting assumptions beneath all of this is also probably in need of an update due to every part of a modern car becoming laden with sensors and climate change, et cetera.
There are other reasons, too, as Sherwood points out:
Insurers are trying to make money and raising rates is the way to do it.
“We will continue to pursue rate increases to restore profitability in states that are not yet at target margins,” Jesse Merten, chief financial officer at Allstate told an investor conference in early March. “And in other states, we’ll take rate to keep pace with increases in loss costs.”
Wall Street seems pretty confident profits are on the way. Share prices of major auto insurers such as Allstate and Progressive, are hovering near all-time highs, and are handily outpacing the market this year, rising about 21% and 29%, compared to the 8% gain in the S&P 500.
All of this means you might go in and budget for a new car, get the monthly payment you want, only to be surprised you owe way more than you planned overall because insurance is too high.
As a KBB editor mentioned to Reuters in its report:
“We’re hearing from a number of shoppers that they’re declining to buy a car – or returning one – because they can afford the car, but not the insurance for it,” said Sean Tucker, a senior editor at Kelley Blue Book, a car valuation and research company in Irvine, California.Tucker said Kelley Blue Book recently added insurance guidance to its list of buying tips, urging shoppers to get an insurance quote before they put down any money.Car insurance rates vary widely across the country and are influenced by everything from the cost local collision repair shops charge to the potential for damage from tropical storms and wildfires. According to the insurance shopping site Insurify, the average cost in the U.S. for full auto coverage rose 24% last year and now stands at just over $182 a month. The company said 63% of drivers it surveyed saw rates increase in 2023 and predicts rates will rise another 7% in 2024. But that figure could rise.
What I’m Listening To While Writing TMD
Ok, tbh I’m just listening to more Angel Olsen because I am in a mood. But let’s instead enjoy the super weird and deeply enjoyable “Steppin’ Out” from Joe Jackson. What even is Joe Jackson? I feel like every Joe Jackson song I like is a 90-degree rotation from the other song I just listened to the moment before. Compare this to the stripped-down cover of “The Harder They Fall” or the New Wave-y “Is She Really Going Out With Him.” What a weirdo, I love it.
The Big Question
Have your insurance rates gone wild lately?
Bring back bumpers that can take a bump!
Look at the new cars pictured here. None have anything substantial standing between a corner tap and a broken headlight/taillight housing. When even small collision repairs cost at least four figures, higher insurance premiums shouldn’t be a surprise.
But capable bumpers are deemed ugly and hurt new car sales, so they disappeared and here we are.
I’ve had people afraid they might damage my 62 Austin Healey, I told them they should fear the damage the formed 1/8 thick steel bumpers on either end of the car would do to their car. Those chrome bumpers come away with barely a scratch.
80s cars really had bumpers right. Many 90s cars had good side impact strips to protect the doors from dings, now everything is vulnerable. Plastic panels would be a good comeback, and not rust!
Oh yeah! Those side impact strips were great, I miss those too. Now cars have smooth sculpted flanks that look great until some inattentive kid flings open their family SUV door into your car.
As someone who anal-retentively keeps every insurance billing email, I can answer that with numbers:
2024: $225
2023: $205
2022: $175
2021: $179
2020: $182
Interestingly, I believe it was 2021 that I added a car to my policy, so it’s odd that it actually went down the next year. It’s possible these numbers are influenced by the timing of reinstating full coverage on my summer car because they’re all from around the time of year where that happens. The last couple of years obviously haven’t been great, but in the past 5 years I’m only up about $40/month even with another car on the policy, so it could be worse.
I wouldn’t call it wild at this point, but if it keeps going up at $20 or $30 a year then we might be getting into wild territory.
Another thing I just noticed is that prior to this month in 2024 my bill was actually down to $200, and then jumped just recently. Do with that what you will.
$40 per month is $480 per year. It’s also more than 20%, and that’s in just the last 2 years. I’d say yours is a good example of what the author is saying has happened.
True, but it’s also almost exactly the same amount as inflation over the time period, and as I noted I added a car to the policy in that time so it’s not all increases in premiums. I think my inflation-adjusted, per-car cost is actually down since 2020, which is very much not what I would have expected.
I was a GEICO customer for 20+ years, then I had my 6 month policy rates go from $600 -> $900 -> $1250 -> $1600 over the course of 3 years with no accidents or claims. I switched to Erie this January.
I’m having that happen at currently almost exactly the way you’re saying. I feel like I need to look at Erie
I worked at Geico, they would “get ahead of rate increases” by being the first to raise rates during tax refund season (biggest time of year for signing new policies). The other major insurers followed somewhat soon afterwards…. Geico isn’t a low-cost insurer, just a major car insurer. When I worked at Geico, Geico quoted more to insure my car than State Farm (including Geico employee discount) did. So, while working at Geico I stuck with State Farm.
I just moved from Miami to Atlanta and the last time I renewed my 6-month policy was back in November at $925 for my 12-year-old GTI. I’ve never been in an accident or filed a claim. My renewal is coming up on May 5 and my premium plummeted to $560 while also getting better coverage. Insurance costs in the Sunshine State, whether it be home, auto, or whatever, have become absolutely obscene.
From the article:
“High interest rates are not ideal, sure, but credit availability is slowly improving and a lot of that comes from automaker finance companies currently offering better financing deals.”
“I should clarify, because it came up in the comments, that I’m not necessarily arguing for a return to the super lower interest rate environment we were in and, frankly, I agree with those who say interest rates staying on the higher side is ultimately a good thing as it gives the Fed wiggle room to jumpstart the economy if something goes wrong.”
I’ll argue that rates aren’t “high” or significantly “on the higher side.” The average for the 10 year treasury since 1962 is ~4.25% (https://fred.stlouisfed.org/series/DGS10/). As I write this the 10 year is at 4.57%. The incessant “rates are way too high” crowd on CNBC is getting old. They have the memory of a goldfish and seem to have totally forgotten the 70’s and 80’s. If rates start to really drop, it’s likely that it’s because a recession is happening.
What was different and caused pain is how quickly rates increased as seen in this chart:
https://www.macrotrends.net/2016/10-year-treasury-bond-rate-yield-chart.
That caught people and businesses (see Signature Bank) off guard. Everybody just needs to chill. It just takes time to get used to these historically normal rates.
Yep, I remember some early-eighties mortgage rates @ 17%!
But I want my new luxury truck NOW!
A recent fender bender on my 2019 Fusion was a $13,000 CAD claim, so like $9,800 USD. Bumper cover new and painted, plastic chrome grille insert, one new LED headlight, paint part of hood on one side, and some ‘module’ and various brackets and bobs behind bumper cover. Note that I have new value insurance that mandates new parts be used.
After the accident, nothing fell off, everything intact and attached and the car was perfectly drivable. From 50 feet away you wouldn’t be able to tell it was in an accident. Parts costs is part of the problem, one new headlight for Fusion Energi is over $2,000USD. Check eBay.
Here is my suggestion to help. The government needs to mandate a universal LED bulb/ insert modulefor headlights. The headlight casing should be a cheap plastic box and the led module inside should be universal and easy to replace. Complicated proprietary LED headlights and exterior lighting are a problem.
Going back to the sealed beam era… If you look at the prices of early Cadillac LED taillights, this makes a lot of sense. I’m not sure the ‘every car has a custom lighting setup (that probably isn’t very good anyway)’ mode of design is a great thing to continue.
The fun part is that the LEDs themselves shouldn’t really exceed $500 in total. It’s likely mostly price gouging and in some cases, supply.
we are quickly reaching the point that replacing a single headlight may be a total loss to a vehicle.
I know someone who took 4 easily repairable dents to the hood from hail on a brand new Subaru. Insurance wanted to write it off. They automatically assumed they were going to be replacing the windshield. After some clarification, they covered the couple hundred bucks to have the dents pulled. A certain amount of this must be self inflicted stupidity at insurance companies.
Happy to see a Joe Jackson shoutout. He’s so incredibly, unapologetically weird. He has some more accessible songs that kind of fit under the 80s alternative banner…and also songs like Cancer, a 6 minute jazzy lounge piano ballad with a chorus that repeats “everything gives you cancer, there’s no cure/there’s no answer”.
What a fucking weirdo. I love him. I think Steppin Out is probably my favorite song of his so good choice.
“Is she really going out with him?” A funky song indeed.
He also has a symphony album with Steve Vai.
I was unaware of this, but it definitely tracks.
Dang, who could of foreseen that making the entire economy and well-being of the nation being dependent on one mode of transport, which ultimately controlled by private corporations, and thus affected by the whims of Capitalism, might have been a bad idea! It’s cool though, only a poor would be susceptible to spiraling cost of a necessity. And we don’t need lower-paying labor, especially in all-ready totally thriving rural communities which famously have public transport and density. This isn’t a massive social problem brought on by primarily greed of the few. And we definitely don’t need a certain large bureaucracy to consider that these cost might make overall growth unsustainable due to a significant inactive workforce due to transportation issues.
Not to mention the health care costs and lost productivity of vehicle related injuries and air pollution. Externalize everything!
I’ve always dropped my regular full-coverage insurance from any car once it’s worth $5K or less. I was amazed that when I did that with my Volt a few years ago, my yearly bill was instantly cut in half.
I currently have 7 cars on a liability policy through Auto Owner’s and another 4 on a classic policy through Hagerty. Total cost for everything was still under $1,000 last year. Granted, I also have an umbrella policy and multiple properties all with the same outfit, so the stacked-up discounts help. I pay for it a year at a time (another discount) via auto-withdrawal (another discount) and that 7-car liability policy renews in July. My daughter should have her license by then so I’m at least a little nervous at whatever the resulting increase is going to be.
My home-owner’s insurance actually dropped about $100 a year last year. Turns out all I had to do was spend $27,000 on a new roof!
I dropped $32k on a metal roof and saved $1,500/year on my home insurance. That almost offsets the car insurance increase from two EVs and my wife’s at fault accident.
I looked into a metal roof since I’ve had 2 asphalt shingle roofs replaced in 3 years due to abnormally wild hail storms. Was ready to pay the extra cost but then the HOA nope’d the idea. Tesla roofs and some weird imitation slate is fine since they are shingle-like. Metal shingle-like was too expensive. Ended up paying a little more for a class 4 shingle.
Got a new Subaru OB XT and my premiums only went up $70 per year compared to the 7 year old Honda Pilot that I used as a trade in. Another $15 per year gets me new car replacement payout for 6 years.
Overall my insurance has really minimal increases over the past 10 years.
Two roofs in three years! That’s rough! The first roof on my house lasted a few months. The second lived 23 years. This one should last longer than I’m alive.
That’s the advantage of living in a neighborhood without an HOA! My neighborhood was founded with covenants, which could have turned into an HOA if people wanted it. Those covenants had nothing about limiting or requiring roof types/styles. So far, no one cares about my roof.
Look at the fine print on those class 4 shingles. The ones I looked at started to lose impact resistance after 15 years.
FYI, the estimates I got for a Tesla solar roof were $30-$35 per square foot of roof. It was a lot cheaper to go with a standing seam metal roof with traditional panels.
I lived in a neighborhood without an HOA. Got fed up with my next door neighbor that had what everyone thought was an abandoned house, but he lives there and he keeps blocking the city from condemning. The roof is mostly in tatters, weeds are 4 foot tall in backyard. Fence was falling down. Monthly I had animals drag themselves into my backyard to die. The baby possums were cute though. Driveway filled with dilapidated RV and 2 cars on flats. His in-ground pool / mosquito farm, had a 4″ diameter tree growing out of it. I researched my current neighborhood’s HOA before buying and they are pretty much a responsive rather than a proactive enforcer.
On a side note, the Tesla Roof got half of it’s shingles destroyed in the last hail storm. The guy had it for 3 weeks. 7 months later and still no repairs. When I talked to him a couple months after the storm, he was going in circles with his insurance and Tesla. Insurance says Tesla should cover because of warranty and some guarantee of impact resistance. Tesla only replied once saying that if the hail (racquetball size) was big enough to destroy the shingles, then it is beyond what they guarantee and that they won’t be able to make repairs for about a year out. Guy didn’t know if Tesla was backordered on materials or installer schedule. Took him almost 2 years to get the roof the first time.
Add to that, every third commercial on TV or the Internet is for car insurance. That gekko being so popular in 1999 made every other insurance carrier up their advertising budgets significantly, and we all pay for that.
The insurers are spending billions of dollars on advertising:
https://www.insurancebusinessmag.com/us/news/breaking-news/geico-reports-largest-cutback-in-ad-spend-for-2022-439853.aspx
I’ve been with the same car insurance company since I started driving ~40 years ago. They never used to spend a dime on advertising but started a few years ago, hiring Gronk as their spokes-person.
Hey, me too! Though I don’t remember the last time I got one of those checks they used to send out at the end of the year if they didn’t pay out enough claims. That’s the way insurance should be.
Hmm, pretty sure we got a rebate last year. Not a lot, maybe $50 across 3 cars, a house, and a life insurance policy.
However, since they were my insurance when I was a teen, I think they have still spent more on me than they have made in premiums. Might be at the break-even about now.
The next third of commercials on TV are some ambulance-chasing attorneys trying to convince you that an accident entitles you to some big payout!
And the final third, prescription drugs with horrifying long lists of terrible side effects as people dance and smile
Welcome to the new Malaise era, same as the old Malaise era… stubborn inflation, wage stagnation, insurance companies dictating everything, car companies in panic mode due to drastic shifts in regulation, all conspiring to constrict consumer choice.
No wonder people chose to say “F-it” and snort another line so that they could disco all night while the world burned.
Cries in Michigan
Insurance is high, my Polestar went from $900 for 6 months to $1200 with no recent changes at all. I blame the lack of parts to repair these vehicles that insurance companies are totaling them. I have no tickets, no car accidents, nothing.
Same here in Seattle with our Polestar–the jump was very recent, and significant. I will say I’ve been disappointed with how Polestar has decided to run their servicing. Especially now with the corporate break with Volvo, sharing services is off the table.
Granted I expected this getting into a Polestar, and took the risk cause I thought the car was cool, butttt makes it hard to recommend them for sure.
This is exactly the things I need to figure out bf buying an ev. I.e. how easy/hard would it be to get it fixed if there is a (fixable) accident?
Are there enough body shops near(ish) enough that they have multiple that have a decent amount of experience reparing annev car body.
Same question on the mechanicals. What mechanic options exist near(ish) enough to me? I really would prefer an indy mecanic that specializes in evs. And of course, per this article, what would my insurance costs look like?
The above questions are at least equally important as…
“How much range does it have at a steady 70 mph?…
Or
“What long to recharge on a road trip?…”
My insurance hasn’t changed since like 2022, AFAIK. I’m still on my mom’s insurance, and I hand her $25 a week for my Compass. Have been for well over a year now.
Granted, I’m not getting my insurance directly through a company like State Farm or Allstate, but I don’t know if that’s a good thing or not.
Just got my renewal notice, and my premiums are going up 24%. Not as bad as some, but still a kick in the teeth.
I recently took advantage of the 0% financing Mazda was offering on a new CX30 turbo (a vehicle I would’ve purchased outright if rates were >4.5% or so). This replaced a 2014 Mini Countryman S All4; my insurance rates rose about 12% (I pay every 6 months) but I don’t know how much of that was due to the new vehicle vs an increase I’d have had anyway.
I’m done with insurance for the most part. So after I’m done with my current car free living situation I’m either moving to NH (where car insurance isn’t legally required and subsequently it has the lowest rates for car insurance in the country), or I’m going car free somewhere else.
Insurance is shit.
Until someone who doesn’t have insurance to cover your damage slams into your vehicle.
I was referring to all insurance, not specifically car insurance. That being said you’re at the mercy of the insurance company to pay out what they owe, above a certain amount it’s cheaper for the insurance company to have their in house lawyers to fight any lawsuit you file to get what you’re rightfully owed, and generally speaking if you’re trying to cash in an insurance policy you’re not in the best financial straits, so even if you sue they can wait you out 99% of the time till you are bankrupt or you settle for less than what you’re owed.
For car insurance at least they wouldn’t cover the full value of any vehicle of mine anyhow. When I first got my 94 Toyota Pickup V6 4WD 5MT with 49K miles they valued it at $7200. If you ever see one with that low of mileage for that cheap then buy it.
It’s total shit until you’re found to be at fault for an accident with an expensive vehicle, or injuries.
With the old lightweight automobiles I drive it would be like toddler being found at fault for injuring A NFL linebacker in a pickup game because after getting decimated by the linebacker one of the toddler’s many compound fractures poked the linebacker.
Live Free or Die, bub
Governments had the opportunity to be a guiding hand of change in regards to climate change, city development, and vehicle design, but they sat on their hands so now the guiding fist of insurance is gonna force all sorts of corrections or pay the price.
Guiding fist? Never heard The Invisible Hand referred to quite like that!
Guiding Fist is a new Marvel super hero along with his sidekick Pimp Slap.
My insurance hasn’t gone wild yet (though I did have to switch from Progressive to Geico to get a better rate a couple years back, so I may have just timed that well), but I was curious after hearing about the high rates for Tesla and wow. Any Tesla VIN I threw in there for a quote on my current insurance would more than double my premiums (replacing my daily driver and keeping my pickup on there). The highest increase with other mass-market vehicles was about a 20% increase (which also felt too high).
It’s important to occasionally shop around and definitely shop around if you are changing vehicles, moving, or otherwise might see premium changes.
Those who choose to live in paradise are finding that doing so comes with a cost. Just like living in the Rust Belt comes with a cost.
My DD has a Black Book retail of $7200 and insurance currently costs $1800/year.
Insert the image of the ‘prove me wrong’ guy at the table meme saying “insurance companies are evil, prove me wrong” on the sign.
Lol my car insurance 6 month premium straight up doubled last year. This was with, no accidents, no tickets. I called them to be like “what’s up??” and the woman just said “oh it’s inflation”
Same here. Been a State Farm customer for 20+ years with no claims beyond cracked windshields. I know they’re not a discount insurance company by any means, and we have a LOT of high coverages on our newish cars, not to mention homeowners, an umbrella policy and a few others.
Our cars are not high performance or particularly valuable (2020 Kia Soul and Hyundai Santa Cruz). My wife and I also have clean driving records, no accidents, excellent credit, and are in our 50’s. We’re ideal customers for insurance.
When I called the agent, I got the same shrug you got. What really pissed me off was the complete lack of indication that a 40+% increase was coming followed by another 50+% increase six months later.
Oh and our homeowner’s insurance went up a significant amount as well, but that’s another complaint for another day.
Had the same thing happen to me. In the past two years our premiums have straight doubled on a 2020 Rav4, 2011 Xb, and a 1998 Tacoma. The problem is, the “cheap” cars are still worth enough to justify having collision and comprehensive coverage on.
Fuck State Farm to hell and back. They’ve been absolutely awful to deal with on a recent claim I made. Premiums have also gotten insane even though I’ve been with them for a decade without a single claim. Actively working with an insurance broker to switch as soon as I can close this open claim.
You misheard. She meant greedflation.
Same here, though it even more than doubled with no changes about 2 years ago. Switched from Farmers to Progressive and ended up paying about the same as I had. Switching was a nightmare, though. After multiple calls and emails where Farmers claimed they couldn’t cancel without some form notarized by King Diamond or something because this is MA and we have weird laws where you can’t get registered without insurance, but can cancel it after (which would be illegally driving uninsured, which is on me) only to claim they didn’t receive the form several times after confirming the right email. I’ve switched insurance plenty of times and never had an issue. I eventually had to end up on a 3-way call with Progressive and Farmers while they had to acknowledge receipt of this BS form as I resent it in realtime. Normally, I’d just stop payment on the pricks, but as I had them on auto withdrawal (something I have only done once before and had trouble canceling, but people tell me I’m paranoid and “everybody does it and nobody has problems”, but being 2/2, I can only conclude that they’re just lucky or more likely too dumb to know they’re getting screwed, like all the people out there paying for subscriptions they forget they even have), my CU had to charge for it or some BS, I forget, so a fight it was, though entirely unsatisfying vs an actual fight where I get to sit back later and smile at the sweet sting of torn, scabbed knuckles. There is no level of horror that could happen to the executives of these companies that would elicit any sympathy for them from me.
Reminder that shopping around and switching insurance companies every few years can help mitigate this.
I switched home/auto/umbrella last year after State Farm raised rates and ended up below my 2019 prices with Allstate (same level of coverage).
It’s annoying and stupid but it does work. I expect to need to switch again in ~2027 now.
To jump off this, moving can make a significant difference too. Post college graduation I moved states, and between that and switching companies cut my rates in half as a single early 20’s male.
When I called to cancel I was also told directly “If you had told us you moved out of Maryland your rates would have gone down significantly.” This has continued to bolster my argument that Maryland has the worst drivers, so bad in fact, that insurance is far higher.
Also bolstering this is my dad’s 2012 Accord, with ~130k miles, and over a dozen accidents, only one of which was the drivers (my) fault. Pretty sure the body shop we take it to every time has made at least double or triple what it cost new, and yet it never gets totaled.
I don’t know much about Maryland or its drivers, but many times the moving thing comes down to different state laws. Michigan is notorious for this and I hardly think its drivers are better or worse than neighboring states.
There are enough “visiting” drivers here in Virginia that I can confirm that Maryland drivers are collectively some of the worst out there.
97 times out of 100 if there is a car passing you on the right/shoulder/at appalling speed in otherwise calm traffic, it has Maryland plates on it
LOL, yeah, I’ll give you that. When I moved out here I was astounded by that maneuver.
There are plenty of bad drivers in MD, but most of them have out of state plates. I swear Virginians come here to get their fill of speeding.
I’m fortunate to have a “guy”. In the early 2000’s I was lured into a local small town insurance broker’s place as they were the only ones who would consider insuring the Karmann Ghia I was daily-driving for full coverage. Since then, the manager over there goes over my insurance portfolio every couple of years and occasionally finds substantial discounts if we bundle and move it all to another company. Early on I’d have to drive a couple of towns over and sign a bunch of papers whenever this happened, but nowadays it’s mostly emails and maybe a fax or two. I also used to shop around on my own from time to time, but nowhere else even came close so I quit bothering.
It’s so annoying that you need to change to get anything resembling a decent rate with insurance. They’re as bad as cell phone companies, in actively shitting on current customers while fellating new ones.
My rates have gone up a bit ~$10 a month, so not too terrible, but I still believe there needs to be regulation on insurance companies (which will never happen because corporations are people, too), because if you are legally mandated to have coverage to drive then there should not be free market pricing. The top 10 companies combined got $213.1 Billion Dollars in premiums as of 2022, which is fucking nuts.
While I agree with you, if they spent $230 Billion on customer cars, those are failing businesses. Its profit amounts and margins that matter here, not total premiums.
Insurance companies are some of the most regulated businesses there are, at least in terms of premiums they charge. In most states they are limited to specific maximum profit margins and can’t raise premiums beyond that level. Remember when during COVID they were refunding premiums? This wasn’t out of the goodness of their hearts as they would have you believe. It was because they were exceeding their regulated maximum margins.
This regulation probably doesn’t apply to optional coverages.
Home insurance is becoming (more of?) a thing as well. I know multiple people who have sold their home and moved because of home insurance difficulties
Home insurance in FL is full on crisis mode
My in-laws are experiencing this – after the last hurricane their policy increased by $500/month even though they’ve never made a claim and no damage has occurred to their place ever that they’re aware of. They were told (but not guaranteed in writing) that they could get it “closer” to their old rates by replacing their roof. Their roof has architectural 30-year shingles, is about 15 years old, and has no real signs of age so I’m not sure why there would be such a discount. If they do go through with replacing it my guess is “closer” will end up being $50/month in their favor, not $500.
WSJ had a writeup last week or so talking about how home insurance companies are using drones and satellites to capture all the images they can of a house, and then feed all that trash through and algorithm… It had identified one woman’s home as having a “bad roof” and dropped her insurance, but she Just had the roof put on! Despite being able to prove that she has a brand new roof, the insurance would not listen since the algorithm must reign supreme. My brother just bought a house and the insurance he got announced that they would not insure any homes older than 40 years old… insane!
Yet another sad result of “AI all the things!” and “the computer is always right” mentality. Nope, it’s a darn computer! Garbage in, garbage out.
My buddy bought a house off foreclosure a bunch of years ago. He was told the insurance company he had chosen to go with wouldn’t insure the house because the roof didn’t have enough of a pitch (he was SW of Cleveland at the time, so snow was a consideration for sure). It was a 50’s ranch, with a slightly concave roof, definitely not something you’d find built any more.
The kicker was that his insurance company was the same one insuring it for the bank! He tried to point that out to them, that they’re insuring something they’ve already agreed to cover. They didn’t take the bait! lol
Not insuring houses over 40 years old is absolutely insane, especially seeing the quality of some of the new construction going up around here.