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Started By
Message
Insurance rates up? Here's why.
Posted on 1/4/24 at 7:47 am
Posted on 1/4/24 at 7:47 am
Been in the business since 1995 so I have a pretty good pulse on the industry. Over the last several years insurance companies have paid out more in claims than they have collected in premium, especially in auto liability claims.
Vehicles cost more to repair today due to the technology on vehicles today. Most vehicles have cameras, lane departure signals and adaptive cruise control. When the technology is damaged, cost of repairs are up 200% in some cases.
Finally, global catastrophic property claims are another reason. If you live on the coast, you will pay more in premium than someone who lives inland.
Here is the bottom line. If carriers pay out more in claims than premium collected, everyone's premium is going up.
Vehicles cost more to repair today due to the technology on vehicles today. Most vehicles have cameras, lane departure signals and adaptive cruise control. When the technology is damaged, cost of repairs are up 200% in some cases.
Finally, global catastrophic property claims are another reason. If you live on the coast, you will pay more in premium than someone who lives inland.
Here is the bottom line. If carriers pay out more in claims than premium collected, everyone's premium is going up.
53
Posted on 1/4/24 at 7:49 am to VandyBoysWhistler
Unless you are talking about health insurance
Posted on 1/4/24 at 7:51 am to VandyBoysWhistler
wow. groundbreaking news. who-wudda-thunk??? VandyBoys dropping absolute dimes of knowledge.
Posted on 1/4/24 at 7:51 am to VandyBoysWhistler
quote:
VandyBoysWhistler
You hit the nail on the head. Insofar as car insurance goes, Louisiana's legislature recognized this problem back when Blanco was governor (2004) and raised minimum levels from 10/20/10 to 25/50/50 thus creating a system where more premiums would be paid and more coverage provided. Blanco vetoed the bill. The next year the legislature managed to get through a paltry $5K increase.
In the past 20 years....all the costs have continued to rise and yet the insurance companies are still collecting bare minimum premiums
Posted on 1/4/24 at 7:53 am to VandyBoysWhistler
No shite.
Doesn't make it right though...
Doesn't make it right though...
Posted on 1/4/24 at 7:53 am to Barrister
No one wants to hear this, but it is time for an increase in the minimums.
Posted on 1/4/24 at 7:54 am to VandyBoysWhistler
I'm in the industry as well and there are numerous factors which influence pricing, and just about everything now is yielding an increase.
Inflation, excess losses across other lines of business, increase in catastrophic events, increased cost of litigation, increased construction costs, trends out of London, etc.
Inflation, excess losses across other lines of business, increase in catastrophic events, increased cost of litigation, increased construction costs, trends out of London, etc.
Posted on 1/4/24 at 7:54 am to The Mick
Agree 100%, but it's a reality for all of us.
Posted on 1/4/24 at 7:56 am to VandyBoysWhistler
Well I don’t want most of those toys in my vehicle. You can’t find stripped down new vehicles though.
Posted on 1/4/24 at 7:56 am to The Mick
quote:
No shite.
Doesn't make it right though...
When risk is transferred, internal and external factors are used to calculate the premium for the risk.
Don't want someone else's claims to factor in to your premium? Self insure.
Eta- speaking in general as I know self insuring isnt possible when insurance is required (eg. auto)
This post was edited on 1/4/24 at 8:01 am
Posted on 1/4/24 at 7:58 am to VandyBoysWhistler
“BuT IvE nEvEr FiLeD a ClAiM”
Posted on 1/4/24 at 7:59 am to VandyBoysWhistler
quote:
Here's why.
1 - Crooked politicians writing terrible laws
2 -captive audience
Posted on 1/4/24 at 8:02 am to VandyBoysWhistler
quote:
Over the last several years insurance companies have paid out more in claims than they have collected
Then someone taking my share. between my wife and I there are 46 years of driving. Zero insurance claims. Maybe insurance needs to see what they're doing.
Posted on 1/4/24 at 8:10 am to VandyBoysWhistler
Now do those that drive with paper plates? How much does theirs go up?
Posted on 1/4/24 at 8:11 am to VandyBoysWhistler
quote:
Been in the business since 1995
Posted on 1/4/24 at 8:27 am to 632627
quote:
excess losses across other lines of busines
This is the horseshite reason. Get out of businesses you don't understand and get back to what you do best.
If I can make poor business decisions and know I have a back stop of raising rates, then there is no incentive to perform.
Posted on 1/4/24 at 8:29 am to VandyBoysWhistler
quote:
Over the last several years insurance companies have paid out more in claims than they have collected in premium, especially in auto liability claims.
For auto, this is a self fulfilling prophecy.
They argue with everyone and give you the runaround so that you have to hire a lawyer.
I have a coworker trying to get his truck fixed after it he was hit from behind in Oct. Freaking Oct. The other guys ins told him to get a quote from a particular body shop, got a $1300 quote, gave him the runaround for a month and a half, then said they wouldn't pay this body shop. To go to another. Dude can't get his truck fixed. Will probably have to hire a lawyer and sue for the repair, which will cost the insurance company way more than $1300.
Posted on 1/4/24 at 8:32 am to VandyBoysWhistler
Insurance companies are still buying football stadiums and first slot superbowl commercials.
Forgive me if I don't like paying more
Forgive me if I don't like paying more
Posted on 1/4/24 at 8:33 am to VandyBoysWhistler
You're going to get blasted but it's the truth. COVID had an effect too, auto accidents coming out of COVID were much more severe, higher payouts.
I work for a top 10, I haven't seen the year end numbers yet but last I checked only one or 2 in the top 10 had a combined ratio under 100, meaning only 1 or 2 companies were profitable. Our commercial lines were, that's it.
I work for a top 10, I haven't seen the year end numbers yet but last I checked only one or 2 in the top 10 had a combined ratio under 100, meaning only 1 or 2 companies were profitable. Our commercial lines were, that's it.
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