“Auto insurance across the country is taking a major, major hit from a slew of different factors,” Karl Susman, with Susman Insurance Agency, told CBSLA.
Susman is an independent insurance broker. He said rates nationwide are going up 20, 30, even 40%, and one of the reasons is the soaring cost of new and used vehicles.
“Right now, used car prices are up over 26% and new car prices are up almost 10%. So, if you have a car accident and you have to buy a new car, the insurance company now has to spend all this extra money to get you another vehicle,” Susman said.
On top of that, supply chain issues have made repairs more costly and time-consuming. the labor shortage is also keeping cars sitting at the repair shop for longer periods. Finally, Californians are once again driving as much as they were before the pandemic, and more miles means more accidents and more claims.
“Unfortunately, people are driving incredibly fast. Fatalities due to auto insurance claims are up almost 20% in the last 12 months,” said Susman.
California has one of the toughest regulatory agencies in the nation, and so far the Department of Insurance hasn’t approved a single increase since the pandemic began, though Susman said that dozens of been filed in the past six months. There’s a ceiling of 6.9% for most increases, but that doesn’t stop insurers from filing for multiple hikes.
“So, what we are seeing is back-to-back to back-to-back 6.9% rate increases in auto insurance.”
Source – https://www.cbsnews.com/losangeles/news/california-drivers-hit-with-high-gas-prices-and-auto-insurers-trying-to-raise-rates/