this post was submitted on 20 Feb 2024
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Car insurance rates are surging as Americans struggle to pay for basic necessities and ongoing debt.

The newest Consumer Price Index shows car insurance spiked 20 percent year over year. The surge in pricing occurred after years of gradual price inflation, with earlier reports finding the rates grew by 36 percent since 2020.

That's at the same time debt is soaring for many Americans. While Americans hold around 1.75 trillion in student debt loans alone, they also have $1.05 trillion in credit card balances not paid off.

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[–] dragonist@kbin.social 53 points 9 months ago* (last edited 9 months ago) (1 children)

Anecdotal but Liberty Mutual increased my rates annually, refused to lower cause I was at lowest rate possible (supposedly, even recalculating as a new customer). Went from 135 to 150 to 170 at last renewal. Then after contract renew I get hit for 205. Said they adjusted rates for everyone in my area and tough shit. And then had the audacity to demand 127 after I canceled my policy because it was a few days after a payment, and they claimed to have charged for the previous month. I remember paying the first month upon signing up with them, not as “accrued”, but a month and then being covered between them and the next payment.

Left them to State Farm and went from 156/month for 6 months DOWN to 125/month at renewal for 6 months. New Hyundai Venue (not one they refuse to insure due to theft), full coverage but the lowest possible.

I’m still mad about it but happy I left.

Shop around. Your loyalty means nothing to them.

[–] andyburke@fedia.io 7 points 9 months ago (1 children)

I've been with State Farm for 20 years. Actual agent I have met with a few times. Have had one or two claims over the years and they worked with me pretty reasonably. My rates have never "jumped" but have had what I'd consider some minor bumps over the years. Of the many companies I've dealt with, they're one that has at least not given me a huge headache.

I don't have anything to do with them other than being a client, and mileage always varies, this is just my experience. I call out a lot of shitty companies, seems worth letting others know if one isn't terrible. (Also, I live in a major metro, no idea what it would be like someplace else.)

Same, I'm with State Farm and meet with my agent every few years to make sure my coverage makes sense. The last time I met with her she was able to get me better coverage for what I need at a lower monthly cost. My rates have gone up and down a little over the years, but nothing major in either direction.

[–] cybersandwich@lemmy.world 47 points 9 months ago (1 children)

The price of cars is through the roof. It makes sense that insurance would go up to cover it.

When a new car is double what it was 10-15 years ago, our insurancehas to go up.

The issue here is stagnate wages.

[–] RGB3x3@lemmy.world 27 points 9 months ago (5 children)

And also insurance companies charging just as much as they can get away with.

The US system is designed to squeeze every last penny out of a person, to the point they can still "survive," but not so much that they become destitute and can no longer buy things and pay for essential services.

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[–] reddig33@lemmy.world 36 points 9 months ago* (last edited 9 months ago) (12 children)
  • People insist on driving larger cars, creating more severe accidents.
  • People insist on driving more expensive cars, driving up replacement and repair costs.
  • People insist on outlawing speed cameras and red light cameras, driving up accident rates and severity.
  • People insist on increasing speed limits, increasing accident rates and severity.
  • Roads and merge lanes are poorly designed as governments cut corners. Again, this increases accident rates and severity.
  • States don’t test drivers regularly for competence. This means impaired drivers and poorly skilled drivers remain on the road, causing accidents.
  • Urban police forces no longer enforce traffic laws in many cities, increasing accident rates.
  • Some states are getting rid of car inspections. Which means more cars with bad tires and no headlights and more accidents.

Add inflation and greedflation, and It’s no wonder insurance rates are higher.

[–] partial_accumen@lemmy.world 77 points 9 months ago (1 children)

People insist on outlawing speed cameras and red light cameras, driving up accident rates and severity.

I can't speak for your state, but red light cameras started being a great source of revenue from fines, so people started rigidly adhering to them. So this caused two problems.

  1. While there were less T-bone accidents meaning people running red lights and hitting perpendicular traffic, all other types of accidents increased by 18% because people were hard stopping so as not to get fined and getting rear ended. source. So if your point is lower costs because of fewer accidents, Red light cameras increased accidents.

  2. Because people were not running lights anymore, the fines from red light cameras went down. The money was so good that cities got greedy, they started randomly decreasing yellow light times to cause more people to run red lights to increase fines again video source

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[–] hddsx@lemmy.ca 33 points 9 months ago (6 children)

Red light cameras cause accidents because people slam on their brakes too hard.

[–] deadbeef79000@lemmy.nz 5 points 9 months ago (2 children)

Or, someone's following distance is too short.

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[–] anemoia_one@lemmynsfw.com 31 points 9 months ago

You forgot the big part

As an example, progressive insurance

It’s more profitable to raise rates, and they can get away with it

[–] madcaesar@lemmy.world 26 points 9 months ago (2 children)

Some of these are valid. But speed cameras do fuck all for safety. They are a private company scam to take money from people

[–] RGB3x3@lemmy.world 15 points 9 months ago

The better way to go about it is to redesign roadways to force people to slow down. Narrower lanes, trees on each side, no more 6-lane highways through semi-residential and mixed-use areas. And then invest in public transportation so that fewer people even need to drive their own cars.

But I'm preaching to the choir on Lemmy and hoping for hell to freeze over.

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[–] admiralteal@kbin.social 24 points 9 months ago (2 children)

Those first two, the "people" are largely the auto manufacturers.

Smaller and cheaper cars are SUPER popular in the rest of the world and are literally not available at all in the US. The auto mfgs will tell you it is because of US preference, but in a country of 330 million, there doesn't need to be that much demand compared to these vehicles popularity in, say, a cheese-loving nation of 65 million. Even if they are immensely less popular, there is still MORE than enough market for some of these ALREADY-BEING-PRODUCED vehicles.

But the US auto mfgs refuse. They go bigger and more expensive. The US consumer has no real choice.

For your fourth and fifth, the "people" are US civil/transportation engineers. They must be stopped. They are a scourge. There's no culture of safe road engineering in the US. AASHTO are an association of insane fuckwits.

I am incredibly skeptical that the behaviors of US drivers are significantly different than anywhere else in the world. I'm pretty skeptical of worries over inspections or licensing requirements and am CERTAIN that additional police enforcement will only cause more mayhem and death and not protect any life. I believe it's almost entirely a problem of road engineering, urban design, and vehicle design.

[–] joekar1990@lemmy.world 5 points 9 months ago

Mfgs also don’t produce as many of the base trims so it limits choice further. Then on top of that the dealers tend to mark cars way up. Cars in general are just way overpriced since COVID started and some mfgs are still claiming supply chain issues so they artificially limit supply further.

[–] Passerby6497@lemmy.world 4 points 9 months ago (1 children)

To the point about manufacturers, it's also an issue with emissions laws, because smaller cars have more restrictions on emissions. So rather than figure out how to make cars run better, everyone is making bigger vehicles so they fall into a lower emissions requirement classes.

[–] admiralteal@kbin.social 2 points 9 months ago

But they do produce smaller cheaper cars that can follow those emissions standards - for markets like Germany or the Netherlands. They just refuse to go through the process of certifying and selling those same vehicles in the US market.

Not to be all tinfoil hat, but I think they have a gentleman's agreement to just not be competitive like that in the US market because they can get away with it. Because the US consumer is gullible and our Regulators are asleep at the wheel.

[–] psycho_driver@lemmy.world 13 points 9 months ago (1 children)

People insist on driving more expensive cars, driving up replacement and repair costs.

It's not like the average US consumer has a say in this. The cheapest car you can drive off a lot is like 25k now. We could have less expensive cars but for half a century we've used tariffs to provide an unfair competitive advantage to our domestic motor companies who only took advantage of it to price gouge.

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[–] mctoasterson@reddthat.com 9 points 9 months ago

Another factor (in the US at least) is over-litigation of any and all traffic incidents. Seems like the default practice now is to get lawyers involved for a fender bender that breaks one tail light. The "at fault" drivers insurance ends up using lawyers to go back and forth haggling with the "victim" drivers lawyers and they finally settle on some ridiculous payment that is 10x what the actual damage was. All that cost gets passed on to everybody who buys car insurance.

[–] joel_feila@lemmy.world 3 points 9 months ago (2 children)

Speed limits dont decrease acidents. They are the most famous example of a safety feature not working

[–] tissek@sopuli.xyz 6 points 9 months ago (2 children)

If the road is made for 90km/h, wide and with good sight lines, reducing legal speed to 70km/h doesn't do much. There also needs to be made adjustments to the road so you cannot drive faster than 70km/h. Well so you aren't natirally incentiviced to drive faster than you should.

[–] joel_feila@lemmy.world 4 points 9 months ago

Once the state of Montana had no speed limits out side ot towns. When they added speed limits there was no change to traffic accidents or deaths.

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[–] MagicShel@programming.dev 20 points 9 months ago (11 children)

Could be related. Low credit scores can lead to higher insurance prices. But that doesn't seem right because the actual risk shouldn't have likely changed. Could be higher repair costs. Of course simple corporate greed could be to blame. Didn't need to actually say that one did I?

My car insurance went up $1200 this year, which blows my mind. No reason given.

[–] generichate1546@lemmynsfw.com 13 points 9 months ago

Two years ago I was paying 1300 a year now I'm paying 1700 for six months and I've literally had nothing change in my driving record.

[–] 52fighters@sopuli.xyz 9 points 9 months ago

Used car prices went up, new car prices went up, collision repair prices went up, and repair time increased significantly. We also saw a huge increase in accident severity and a growing trend toward more aggressive driving.

[–] MicroWave@lemmy.world 7 points 9 months ago (2 children)

The article lists several factors:

Because car prices in general have skyrocketed, more Americans are keeping their current cars for longer. This means costly repairs can become more likely, and the car insurers have adjusted their rates accordingly.

In the last year, car repair prices also climbed 7 percent, outpacing inflation by more than double.

A supply chain slowdown and ongoing labor shortages have also pushed the insurance industry to implement price hikes on customers, insuranceQuotes.com analyst Michael Giusti said.

"None of that even mentions the higher medical costs they have to pay after accidents," Giusti said. "Today's higher premiums are just a reflection of those higher costs."

The sudden rise of electric vehicle purchases also carried some of the blame, since EVs are more expensive to purchase and repair, Henn said.

[–] 0110010001100010@lemmy.world 24 points 9 months ago (2 children)

Because car prices in general have skyrocketed, more Americans are keeping their current cars for longer. This means costly repairs can become more likely, and the car insurers have adjusted their rates accordingly.

This makes zero sense as insurance doesn't cover vehicle maintenance/repairs.

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[–] ShepherdPie@midwest.social 4 points 9 months ago (1 children)

I don't understand how more costly repairs translate to higher insurance premiums. The insurance companies aren't paying to replace your engine.

Also their $2500 average yearly premium is insane. I'm in my 30s with two cars and two drivers insured, including comprehensive and the highest coverage progressive offers, and a 100 mile round trip commute, and it's only $1400 a year.

[–] Pogogunner@kbin.social 3 points 9 months ago (1 children)

Your insurance might not be paying for your engine, but if you hit someone else, the liability policy will cover the car you hit engine

[–] ShepherdPie@midwest.social 4 points 9 months ago

That goes along with more expensive cars. They're referring to people who've kept their car longer than average and have expensive maintenance items. If someone crashes into a 15 year old car hard enough, they're just going to total it out. For less severe collisions, they'll restore the car to what it was before the crash, not what it was when new.

[–] seathru@lemm.ee 5 points 9 months ago

My car insurance went up $1200 this year, which blows my mind. No reason given.

Kind of like jobs. If you stay with the same company for more than a couple years, you're probably doing yourself a disservice.

[–] fuckwit_mcbumcrumble@lemmy.world 3 points 9 months ago (1 children)

What car do you have? Is it a Kia or Hyundai?

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[–] aeharding@lemmy.world 5 points 9 months ago (1 children)

Imagine buying a new car in 2024

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