Insurance inflating

March 13, 2024 5:34 PM

Insurance costs to customers are going up, maybe because costs of damage are going up; which is inflationary.

Dropping this in because it made me hiss. I would like to believe that inflation is all down to corporate greed, but I can't see how the effects of COVID-19 and climate change won't make things more expensive, and insurance is one of the aggregating points to see that.

posted by clew (19 comments total)

A mild-mannered CPA friend told me his car insurance went up 35% with no accidents or tickets for decades. I am waiting to see what happens to mine. I haven't received the 6-month renewal yet.
posted by bz at 5:37 PM on March 13

Climate change making homes increasingly expensive to repair or replace, making them increasingly uninsurable.

Demagogues letting pandemics run loose to kill off minorities and other undesirables, following with antivaxxer cults dictating government public health policy. That directly causes supply chain issues that make it more difficult to repair and manufacture cars.

These knock-on effects seem predictable enough that it is surprising that re-insurance companies didn't see this coming. Perhaps that might be the real failure behind the failure.
posted by They sucked his brains out! at 5:49 PM on March 13 [2 favorites]

Just out of curiosity, bz, what model of car does your friend drive?

I've read complaints from other owners of certain brands about their spiking insurance costs, but if you take a step back and think about the fact that Tesla owners can't get their cars fixed, and Rivians are nearly totalled if you tap their bumper...that's not really inflationary to me. God help you if you bought a Cybertruck.
posted by JoeZydeco at 6:02 PM on March 13 [1 favorite]

God help you if you bought a Cybertruck

Honestly the preorders were late enough in Elon's Public Shitlord lifecycle that I'm more inclined to say God damn you if you bought a Cybertruck.
posted by Ryvar at 6:21 PM on March 13 [6 favorites]

God help you if you bought a Cybertruck.

Even He has His limits.
posted by star gentle uterus at 6:32 PM on March 13 [10 favorites]

Weirdly, my disability insurance premium has gone down the last couple years. No idea why; I'm certainly not getting any younger or less likely to become disabled.

Quite content not to own a car, though.
posted by humbug at 7:40 PM on March 13

I heard anecdotally that during the post pandemic supply chain mess there were a lot of vehicles being mechanically totaled by insurance companies because there were no parts /labor available to fix cars even from minor wrecks.

Also all the integrated electronics, touch screens and airbags mean the fixed are no longer mostly just sheet metal, bondo and paint.

Of course this fits into the dream of auto manufacturers. Make it so you end up in a 3 year lease and pay a subscription that includes everything. No used vehicles.
posted by interogative mood at 7:45 PM on March 13

yeah, so even if (like me!) you drive a very common model of car with boring white paint from an era where windscreens didn't have computers in them ... well, whoever you have an accident with probably has something fancy and new, and if it's an at-fault accident your insurance has to pay for their repairs ...
posted by nickzoic at 8:08 PM on March 13 [7 favorites]

Our condo building got some wind and rain damage during a storm in December. Fortunately for us we were able to patch things up during the storm that the actual damage was relatively light. Cost to fix things was mid four figures, and we debated amongst the condo association if we should make an insurance claim. We didn't want our premiums to go up, but also isn't this why we pay for insurance? I called our broker and she just put it to me straight. "Look, everyone's claims are going up this year. Everyone. Storms are getting worse. Materials are getting more expensive. You might as well get back some of the money that you've put in. That's what it's there for. File. a. claim."
posted by bl1nk at 4:42 AM on March 14 [2 favorites]

Somewhat apropos, Automakers Are Sharing Consumers’ Driving Behavior With Insurance Companies (SLNYT).

Modern cars are internet-enabled, allowing access to services like navigation, roadside assistance and car apps that drivers can connect to their vehicles to locate them or unlock them remotely. In recent years, automakers, including G.M., Honda, Kia and Hyundai, have started offering optional features in their connected-car apps that rate people’s driving. Some drivers may not realize that, if they turn on these features, the car companies then give information about how they drive to data brokers like LexisNexis.

posted by zinon at 6:36 AM on March 14

Anecdotally, insurance on my Subaru just went up 40% and I haven't had a claim made in 30 years. (NC)
posted by droomoord at 6:47 AM on March 14 [3 favorites]

When we moved from Katy back into Houston, our insurance almost doubled, despite going down from 3 to 2 cars. (There are 3 of us, now that the Kid moved back in with us.) Supposedly, a lot of it is that there's more car and tire thefts in Houston, but who knows?
The new car has a lot more sensors than my old one, so I imagine that it'll be a lot more expensive to repair.
posted by Spike Glee at 6:51 AM on March 14

Our car insurance cost goes up incrementally every year, even without claims, and that has always pissed me off because it goes against the idea that cars depreciate in value every year. I've asked about this, specifically, and am always told that it's cost of living increases applied to repair costs. I still find it obnoxious.
posted by dlugoczaj at 9:26 AM on March 14

I'm terrified about the moment when, as part of their fight against single payer and the ACA, the insurance companies try to deal with this by allowing information on prior conditions, at which point I'm sure our health insurance goes almost to the point where my wife's salary doesn't cover the monthly premiums.
posted by mephron at 10:40 AM on March 14

My car insurance actually went down this term but any savings were eaten up by a larger increase in premiums for house insurance.
posted by ndfine at 10:45 AM on March 14 [1 favorite]

it goes against the idea that cars depreciate in value every year.

Interestingly, during the pandemic and through 2022 (not sure about 2023) cars actually appreciated generally, which may have a minor effect on rising insurance costs. Also, if cars appreciate or depreciate is kind of meaningless for insurance purposes, because they don't keep a big stockpile of cars to replace yours with, they have to source cars or parts at current rates.


Maybe a profitable way to run a discount insurance company would be to purchase a whole bunch of cars, and replace damaged and totaled cars with one from your stock, perhaps until yours can be repaired at discounted rates. But cars are far too tied to people's idea of individuality for that to work in the real world.

I'm honestly surprised its taken this long for insurance rates to rise dramatically since cars are a 'captured market' and the majority of the US gives people no choice in buying a car or not, at least not if you want to get anywhere sort of fast.
posted by The_Vegetables at 11:27 AM on March 14

Weirdly, my disability insurance premium has gone down the last couple years. No idea why; I'm certainly not getting any younger or less likely to become disabled.

It's not weird. Now that we are in a eugenic public health environment you are likely to cost less when you end up disabled because society is restructuring to be even more willing to let you die than it was when you started buying disability insurance. Endemic covid is herd thinning. When you shave 5-10 years off the lives of the vulnerable you trigger a cascade of all kinds of economic savings which is a large part of why some people are gung-ho about it. Kind of like the way insurance companies switch from pushing for life saving improvements in cars to accident prevention instead. It is actually in their interest that people who would have potentially been seriously injured actually die instead because the payout for a death is much less than for long-term disability.
posted by srboisvert at 11:52 AM on March 14 [1 favorite]

My car insurance went down this year, as it should because my car already isn't worth much and isn't getting any newer, but I'll be in the market for a new car/van in the next few years and I'm not looking forward to what it'll cost to insure that.
posted by any portmanteau in a storm at 11:59 AM on March 14

I get the distress over cars sending their information home to the factory where it's bought, sold, etc but there are other ways they're getting this data, so beware.

One good example: Carfax. Did you know a lot of dealerships and garages have business relationships with Carfax? They get VIN reports in exchange for sending up maintenance data from the service bay.

A few years ago I got a letter from my State Farm agent explaning that I was going over the 10,000 mile/year threshold in my policy and they were adjusting my premium. How did they know this? The dealer sent the mileage up when I brought it in for an oil change. And my odometer didn't even read 10,001. They extrapolated the mileage based on ((miles used / months in service) * 12) and decided I was going over ahead of time. Ugh.
posted by JoeZydeco at 8:46 AM on March 15