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Started By
Message
re: State Farm auto policy increases are insane.
Posted on 8/11/23 at 9:24 am to DiamondDog
Posted on 8/11/23 at 9:24 am to DiamondDog
I don’t think people understand how much money they lost last year. It was 13B.
They wrote way too much bad business in 2020-mid 2022 and they are paying for it now. Guidelines are tightening and they don’t want as many “sub standard” policy holders. They are still writing a ton of business to supplement everything they lose. There is no more loyalty to longer term policy holders. If you can switch to save some money I don’t think any one faults you. It’s a market that you should shop.
They wrote way too much bad business in 2020-mid 2022 and they are paying for it now. Guidelines are tightening and they don’t want as many “sub standard” policy holders. They are still writing a ton of business to supplement everything they lose. There is no more loyalty to longer term policy holders. If you can switch to save some money I don’t think any one faults you. It’s a market that you should shop.
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Posted on 8/11/23 at 9:37 am to DiamondDog
Historically bad UW results
I’m in the insurance industry on the commercial side. If a carrier is running over a 100% combined, it means they are losing money and eating reserves.
95%-99% means you’re really not making any money. 100%-105% is bad. State Farm is running 127%. That’s catastrophic.
Why is this happening? Several reasons.
First, everyone’s favorite bogeyman the trial lawyers. Yes, trial lawyers are a major factor and are driving up the cost of claim payouts and litigation. Investment funding for litigation is also going to be a huge issue going forward as is the fact that juries have a negative attitude toward insurance carriers. They see it as a a chance it to take a shot at the man. Not to mention individuals now view getting in an accident as a chance to hit the lottery. That’s never what insurance was meant to be.
Secondly, is physical inflation. The cost of parts and labor to repair vehicles has increased significantly. The amount of technology in vehicles has made it so that repairing a bumper isn’ just repairing a bumper anymore. It means you have to replace five backup cameras and a couple of computer chips.
Lastly, uninsured drivers and illegal drivers are posing a major issue in large metro areas such as Houston, Dallas, and Atlanta. These drivers make it impossible for insurance carriers to subrogate back for damages when their driver is not at fault.
I’m in the insurance industry on the commercial side. If a carrier is running over a 100% combined, it means they are losing money and eating reserves.
95%-99% means you’re really not making any money. 100%-105% is bad. State Farm is running 127%. That’s catastrophic.
Why is this happening? Several reasons.
First, everyone’s favorite bogeyman the trial lawyers. Yes, trial lawyers are a major factor and are driving up the cost of claim payouts and litigation. Investment funding for litigation is also going to be a huge issue going forward as is the fact that juries have a negative attitude toward insurance carriers. They see it as a a chance it to take a shot at the man. Not to mention individuals now view getting in an accident as a chance to hit the lottery. That’s never what insurance was meant to be.
Secondly, is physical inflation. The cost of parts and labor to repair vehicles has increased significantly. The amount of technology in vehicles has made it so that repairing a bumper isn’ just repairing a bumper anymore. It means you have to replace five backup cameras and a couple of computer chips.
Lastly, uninsured drivers and illegal drivers are posing a major issue in large metro areas such as Houston, Dallas, and Atlanta. These drivers make it impossible for insurance carriers to subrogate back for damages when their driver is not at fault.
Posted on 8/11/23 at 9:56 am to Upperdecker
quote:
Yep we’re apparently going up 38% next month. frick that. Absolute clean records
I deal with a lot of this in my job as well. Clients are often angry because they personally have a clean loss record. However, individual people or individual companies are not a sample. Carriers underwrite based on large samples. Whether or not you have a clean record, you are still part of the larger Louisiana population, and even more specifically a part of your metro area and even your ZIP Code.
The potential based on actuarial standards is that you will be involved in some sort of accident at some point.
As a result of your clean record, you may only get a 40% rate increase. However, your neighbor with a bad record may get 100% rate increase or be dropped entirely.
If you drop your coverage, the insurance company may not care. In fact, it may be a benefit for that insurer to reduce their exposure in your area.
It’s not aimed at you. It’s aimed at your community.
Posted on 8/11/23 at 10:49 am to DiamondDog
we only saw a $25 increase total over two vehicles. State Farm said a bigger hike went on people who had Hyundais, specifically the ones that kept getting stolen.
Posted on 8/11/23 at 10:54 am to DiamondDog
quote:
What has changed out there? Are they trying to shed customers in Louisiana?
Gordon is suing everyone so he can support NIL.
Posted on 8/11/23 at 1:15 pm to DiamondDog
State Farm is awesome.
Wife has a 22 Cadillac and I have a 2021 Tacoma and pay $611 every 6 months.
Wife has a 22 Cadillac and I have a 2021 Tacoma and pay $611 every 6 months.
Posted on 8/11/23 at 1:31 pm to DiamondDog
STF nearly double our auto rates, but our bundled homeowner's rate is so cheap compared to the market search we just did, we're stuck with keeping STF auto.
Posted on 8/11/23 at 1:40 pm to DiamondDog
It is getting to a point where I'm wondering what is the point of having insurance? Seems like half of the people don't and I don't hear of anyone going to jail.
Posted on 8/11/23 at 1:44 pm to DiamondDog
quote:
No accidents and clean record for wife and I.
Wife's car seeing almost 50% increase. $878/ 6 mo to $1,268.
Mine is paid off and seeing $100 increase to $1230.
What has changed out there? Are they trying to shed customers in Louisiana?
At some point, you have to recognize it's less about you and more about a broader risk pool management / strategy that the insurer wants to pursue.
That type of change would indicate they want to pivot towards a different population than whatever risk factors (or lack thereof) you are offering them.
Posted on 8/11/23 at 2:07 pm to Brummy
quote:
1) Auto insurance rates increase
2) Increase in individuals who drop coverage and drive uninsured
3) Increase in claims expenses to insurance companies caused by uninsured drivers
4) Return to Step 1
Exactly!
Posted on 8/11/23 at 6:40 pm to DiamondDog
Wasn't tort reform three or so years ago supposed to stop this?
Posted on 8/11/23 at 8:28 pm to Allthatfades
quote:
Insurance is the biggest damn racket on the planet
Yep that and health insurance
Posted on 8/11/23 at 11:46 pm to DiamondDog
2300 for married couple is f'ing outrageous
remember, state farm has been sued and paid major fines for screwing their customers over, 2 times in last 10 yars.. some how this is totally never brought up about the company.
remember, state farm has been sued and paid major fines for screwing their customers over, 2 times in last 10 yars.. some how this is totally never brought up about the company.
Posted on 8/12/23 at 5:46 am to SeeeeK
As mentioned the amount of insured drivers along with insane costs to repair damage are the bigger issues. While Gordon's NIL is absurd making him go away will not change much.
Posted on 8/12/23 at 10:13 am to iron banks
SF just got a 17% rate increase for auto ins approved in LA. 5 years ago, would never have happened, as anything over 5% is generally frowned upon. Nowadays, rate increases are rubber stamped (except in CA).
Posted on 8/12/23 at 10:53 am to RougeDawg
quote:
It is getting to a point where I'm wondering what is the point of having insurance? Seems like half of the people don't and I don't hear of anyone going to jail.
They've figured out the ultimate solution to any accountabiiity in life: Just become judgment proof.
Posted on 8/12/23 at 11:26 am to DiamondDog
about time they caught up
Posted on 8/12/23 at 11:31 am to DiamondDog
I'll just leave this here from earlier this week:
LINK /
We are saving about 4 grand a year switching from State Farm to Allstate with same or better coverage, almost all from auto policy savings.
LINK /
We are saving about 4 grand a year switching from State Farm to Allstate with same or better coverage, almost all from auto policy savings.
Posted on 8/12/23 at 1:49 pm to Deuce McWin
quote:Yes, but the “reforms “ that actually passed were watered down to avoid JBE’s veto. At the time, I wondered why they even bothered but ultimately realized that they didn’t want the public to perceive them taking a loss. So, “reforms passed” was the headline but they were mostly useless.
Wasn't tort reform three or so years ago supposed to stop this?
This post was edited on 8/12/23 at 1:51 pm
Posted on 8/12/23 at 3:31 pm to DiamondDog
Insurance in Louisiana is at a “crisis” level. We cannot handle these rates and I don’t see it ending. Auto collision and comprehensive are controlled by repair costs, meaning inflation of labor and parts. However, liability is from litigation and it’s completely out of control, but the wolves are guarding the hen house. All of our legislators are tied in with the lawyers. There is no end to this, so who know what will happen.
On the Homeowners front, it’s may be worse, at lease south of
I-10. We are about to see a complete shut down of the real estate industry. Nobody can afford to move due to the combination of high real estate prices, high interest rates, rising property taxes, and massive increases in Flood and Homeowners Insurance prices, along with a lack of availability in some areas.
Let’s see what happens…
On the Homeowners front, it’s may be worse, at lease south of
I-10. We are about to see a complete shut down of the real estate industry. Nobody can afford to move due to the combination of high real estate prices, high interest rates, rising property taxes, and massive increases in Flood and Homeowners Insurance prices, along with a lack of availability in some areas.
Let’s see what happens…
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