mmarshall

Here is a very good article, and charts/rankings, on the cost of insurance by company and state. Not surprisingly, USAA and GEICO are generally the least expensive, although USAA only sells to the military and their relatives.

Maine and Idaho are the least expensive states, and Florida and Louisiana are the most expensive states. Why FL and LA are so expensive is an interesting question, but my guess is the high likelihood of hurricanes and severe storms. Florida also has a large percentage of elderly drivers who don't have the same skills and reflexes behind the wheel that they once did.

(I myself have somewhat slower reflexes than I once did, but I drive in a manner that takes them into account, and my mind is still basically sharp).


It is a long article, and too difficult to cut and paste everything, so I'll post the link here and you can access it.

https://www.usnews.com/insurance/aut...-car-insurance

asj2024

FL is expensive because of a confluence of factors. Home insurance is also amazingly high.

https://www.moneygeek.com/insurance/...nsive/florida/

Several factors contribute to why car insurance in Florida is so expensive, including busy roadways, additional insurance requirements, high healthcare costs, rates of uninsured drivers and risk of severe weather.

bitkahuna

iTrader: (20)

hmmm...

https://www.cbsnews.com/news/car-ins...ates-insurify/

RNM GS3

The insurance industry needs to be regulated but has very powerful lobbyists. The Law demands you have insurance and these companies manipulate their rates without providing any reasoning. Some ppl are paying 100-200% of their car’s value in annual premiums which is insane.

Striker223

That's what happens when the .gov mandates anything....

RNM GS3

100% - btw the insurance industry recorded its highest profits last year!
Not sure of many other industries making records in a slowing economy.

link13

In CA, I did get an explanation of why my insurance went up 24% last year. The reason is there are too many unlicensed, uninsured drivers on the road here. I would prefer that the state focuses on resolving that problem rather than having insurance companies stick it to people who comply with the law.

Striker223

Well sure but that would require them to go after those who don't listen to the law vs people who willingly comply to more and more unfair treatment by the powers that be to compensate for the first group.

They are just picking the easy route

jwong77

I thought this was already being done by the insurance commissioner here in California. Perhaps less regulation would be the answer not more.

wasjr

Auto insurance is regulated by states individually. Every rate change has to be approved by the state. Some states are more cooperative than others in allowing increases. CA is one of the most restrictive states regarding pricing. However, with companies pulling out of the state, they are now allowing increases to provide alternatives for residents.

If people are paying 100-200% of the value of the car it is their own fault. They need to drop all coverage except liability, which is all that is required by law.

Not sure where you got your information, because it is not true for the automobile insurance segment. Most automobile insurers lost money in 2022. There was some recovery in 2023 thanks to rate increases, and in 2024 many are returning to profitability.

Here is a link to a Fitch article. Fitch Auto Ins Industry Article Click on the Combined Ratio. If Combined Ratio is more than 100, then the company is losing money. In 2022 Progressive is the only one on this list that was profitable. In 2023 only Progressive and Geico made money. Claims costs have increased greatly due to increased costs of used car prices, parts, and healthcare, as well as fraud and litigation costs.

swajames

What are you thinking, @wasjr , bringing facts, insight and knowledge to a speculation fest...?

FrankReynoldsCPA

Not everybody has that luxury. If they have a loan they're going to be required to keep collision & comprehensive.

geko29

If you can afford 50-100% of the car's value for a 6-month insurance premium, presumably you can afford to pay off the loan instead.

wasjr

The auto insurance business is cyclical. With companies returning to profitability you are likely to see fewer/smaller rate increases approved by states. People will have more choices so they will get back to shopping, which will result in more competition to get/keep business, so companies will cut rates which will cut margins. Then costs will increase, they will lose money, and the cycle will continue.....

Another piece to insurance company results.....states require reserves to be established to pay claims and insurers invest these reserves. Increased interest rates are now resulting in increased investment income for insurance companies. The reserves from his insurance investments (Probably 10 companies with Geico and General Re being the best known) is one reason Buffet has so much cash in Berkshire Hathaway. I saw the other day that Berkshire owns $234.6 billion in short-term U.S. Treasury bills, more than is owned by the Federal Reserve.

link13

I am not sure what the value of the car has to do with the insurance premium. I carry high limits to protect my property. My policy selection has very little do with a paid off car that is nearly 5 years old. It’s so the person who crashes into me and has a sore neck and then they sue me does not get my house. It’s overly simplified and I admit that. I’ve been in leadership in organizations where someone does something stupid, gets injured, sues you for it, and gets a settlement out of it. I expect that auto insurance follows a similar business model.