US Auto Insurance Premiums Rising Again: Expect Significant Rate Hikes

Main Menu

Automobile insurance premium rates are increasing across the entire United States. As Americans continue to struggle with a downturned economy and more than 9% average state unemployment rates, vehicle insurance rates keep getting shoved skyward everywhere. In California last week, a lawsuit was filed by CAL-FAIR (Californians for Fair Auto Insurance Rates) claiming that proponents of the controversial Proposition 17 are misleading voters and causing them to support a policy that would make it legal for all insurance providers to penalize policyholders for being late on even a singular payment.

Executive Director of Alliance of Insurance Agents and Brokers, Mike D'Arelli states, "This is a weak 'me too' attempt to draw attention away from the numerous false and misleading statements made in No on 17's ballot statements, which last week we sued them to change. Their objective with this countersuit seems to be to bury the courts in reams of paper, kill a few trees along the way, and hopefully redirect attention away from the fact that No on 17 is opposed to a measure that will benefit consumers with more competition, more choice and lower auto insurance rates."

In Florida, leading auto insurance provider State Farm is increasing its rates by more than 9%. Allstate, the state's second largest insurer led by increasing their rates for vehicle insurance by a whopping 16%. Geico and General, the next two leaders in Florida auto insurance provision, are expected to follow suit directly. And in almost every state, automobile insurance policyholders are being disappointed and angered by consistently-increasing premium rates.

Why are auto insurance rates increasing so much in the US?

Major insurers offer 2 main reasons why premium rates continue to rise. First, the costs for medical care, therapy, automotive repairs and replacements, legal fees and more associated with auto insurance claims continue to rise steeply. This causes the insurer to have to pay out more to settle claims. Secondly and maybe more significantly, the crumbled economy is turning people into criminals. Vehicle fraud rates of all types continue to escalate dramatically as individuals are unable to sustain their established lifestyles. A payoff from an insurance company seems irresistible to many who would have never even thought of such things before. Additionally, record numbers of home foreclosures, bankruptcies and defaulted auto loans are still going up.

Insurance companies have no interest in losing money; it's just not going to happen. When crime rates increase, so do required payouts from insurance companies. When payouts increase, premium rates increase to reestablish the positive profit margins that are desired. It's just as simple as that. Automobile insurance rates will continue to rise as long as the US economy continues to thwart the financial advancements of the people.