Car insurance rate hikes cause sticker shock [The Times-Tribune, Scranton, Pa.] – InsuranceNewsNet

Dec 11 – Jackie Hunt was stunned to open her six-month car insurance renewal notice to find her premium had gone up $150.

The sexagenarian Blakely The woman expected an increase given inflation, but the rate seemed exceptionally high because she and her husband, Richard, 62, had no accidents, tickets or changes in coverage.

“I was beyond flabbergasted,” she said. “Nothing had changed. We didn’t raise anything in terms of offset and collision and we didn’t lower anything. It was a complete shock.”

Nationally, auto insurance rates rose 11.6% from January to October and 12.9% from October 2021according to consumer price index data released by the US Bureau of Labor Statistics.

In Pennsylvaniaauto insurance premiums from the 40 largest insurers rose an average of 12.7% in November, according to rate hike records analyzed by New York-based S&P Global Market Intelligencea provider of information services and solutions to global markets.

GEICO Corp. experienced the largest average increase, 23.4%, affecting approximately 408,000

Farm, with an average increase of 16% on approximately 2 million policies, and Liberty Mutual, with an average increase of 17.9% on approximately 222,000 policies.

Industry analysts say the increases are largely linked to inflation and supply chain issues that have led to soaring costs for accident-related parts, repairs and medical treatment.

The number and severity of car crashes has also increased, reaching a 16-year high in 2021, according to the National Highway Safety Administration.

This combination resulted in significant underwriting losses for insurers, said Marc Friedlanderspokesperson for New York Citynon-profit Insurance Information Institute.

“Some industry leaders have indicated that 2022 will be the worst year for auto underwriting ever for their business,” Friedlander said.

This has led many insurers to seek multiple rate hikes this year, said Cate Deventeran insurance analyst with The bank ratea personal finance website that provides information to help consumers.

The average annual cost of car insurance in Pennsylvania this year was $2,002 for full coverage – 13% more than the WE average of $1,771according Discount rate Quadrant Information Services quoted average premium analysis.

What drivers pay varies based on individual factors, including driving record, age, type of vehicle, city of residence, miles driven and coverage limits.

Bundling auto and home insurance, paying the premium in full, and maintaining a good driving record can reduce rates. Industry analysts point to other ways to cut rates:

—Get quotes from multiple carriers. Insurance companies have proprietary pricing models that can vary widely, especially based on geography, Deventer said.

“The exact same coverage can cost very different amounts with different insurers,” she said. “Quotes can vary by several hundred dollars.”

The Hunts found a new car and renter’s insurance policy with the help of Brianna Keelera licensed insurance agent with Comparison insurance in Moosic. They will save approx. $350 annually between the two policies.

—Select limited tort and/or change coverage levels. Pennsylvania allows drivers to choose between full tort and limited tort policies, which dictate the right to recover damages if they are injured in an accident caused by someone else.

Limited liability insurance policies save around 10% to 15%, but policyholders lose their right to sue for pain and suffering except for serious injury and certain other exceptions . Statewide, about 65% of passenger vehicles were insured with limited tort in 2020, according to the latest available data from the Pennsylvania Department of Insurance.

Dropping or increasing deductibles for collision and comprehensive insurance, reducing liability coverage, and/or dropping coverage for underinsured/uninsured motorists also saves money. silver. Consumers should be very careful when considering these options as they can significantly increase personal expenses and/or expose assets.

Pennsylvania requires motorists to take out minimum third party liability coverage of $15,000 a person, $30,000 by accident and $5,000 in property damage.

Noreen Thomasowner of a state farm agency in Clarks Summit, said reducing liability by one level in most cases would only save a few dollars. She strongly advises customers against carrying only the bare minimum, as this exposes them to significant risk, including increased repair costs and medical bills.

“If you hit another vehicle and there are more $5,000 if there is any damage, they can pick you up to repair the vehicle,” she said. ” Today, $5,000 damage may be repairing a dent in a door and painting.”

On the other hand, dropping uninsured/underinsured motorist coverage puts your well-being at risk, the lawyer said. Dan Munley. This insurance allows policyholders to recover their own policy if they are injured by another driver who had too little or no insurance to cover the damage.

“You’re protecting yourself from disaster,” Munley said.

— Consider installing devices that monitor driving habits. Several insurers offer discounts for using a phone app or in-vehicle device that monitors driving habits, including braking force and frequency, the speed at which you accelerate, mileage and what time you drive. Discounts typically amount to around 4%, according to an analysis of 2022 rates by the Zebra, a home and auto insurance comparison website.

Most insurers only use the data for rebate and not to penalize bad driving habits, but consumers should check with the insurer, Deventer said.

Pennsylvania does not prevent insurers from using the data to raise rates, but does require identification of the driving habits being tracked and how they might affect rates, depending on the Pennsylvania Department of Insurance.

state farm only uses its data from tracking devices for discounts, which start at 5% of the premium and can increase over time, up to around 20%.

“We have people who are very hesitant about it, but then someone in the family tries it and they see the reduction,” Thomas said.

Contact the author: [email protected]; 570-348-9137; @tmbeseckerTT on Twitter.

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