It’s becoming harder to buy home or auto insurance in America
Image: Team AIS
For many Americans, insuring homes or cars has gone from a routine, manageable expense to one of the bigger line items on their household budget – if they manage to get coverage at all. (Isn’t adulting fun?)
A number of major US auto and home insurers are significantly hiking their rates in certain states – or even refusing to write and renew policies – due to an increased risk of costly natural disasters.
- Allstate is raising its auto insurance rates by an average of 15%-30% this year in California, New Jersey, and New York, who all agreed to the rate hikes after Allstate threatened to stop renewing coverage in those states.
- Farmers increased home-insurance rates by more than 23% last year for tens of thousands of policyholders in Illinois, Texas, and Tennessee.
- Nationwide has refused to renew more than 10,000 home-insurance policies for properties located in hurricane-prone areas of North Carolina.
- State Farm stopped writing new home-insurance policies in California last year, after racking up a record $13 billion in auto- and home-insurance losses in 2022. The company is also increasing rates for existing California home and auto policies by 20% this year.
The moves come as insurers attempt to recover from some of their worst years in history. US home and auto insurance companies racked up $32.2 billion in net losses over the first nine months of 2023, which is $7.6 billion worse than in the same period a year earlier, and ~$30 billion worse than in 2021.
At the same time, home and auto insurance premiums have spiked, outpacing inflation. Prices for car insurance rose at an annual rate of 19.2% in November, marking the 15th consecutive month of double-digit annual percentage increases, while US home insurance rates grew an average of 30%-50% last year.
📊 Flash poll: For all our US home and car owners: have you experienced a noticeable increase in your insurance rates for 2024?
See a 360° view of what media pundits are saying →
Sprinkles from the Left
- Some commentators argue that politicians quick to blame insurance issues on corporate greed are ignoring data that shows the problem can’t be solely attributed to a single reason.
- Others contend that insurance issues across the US due to climate change and extreme weather should merit a quick and decisive response from lawmakers to change building codes and encourage states to plan for the worst.
- “Don’t buy simple theory — greed — about why some drivers struggle to get insurance” –San Diego Union-Tribune Editorial Board
- “As home insurance premiums spike, governments must act” –Robert Gebelhoff, WaPo
- “Your Homeowners’ Insurance Bill Is the Canary in the Climate Coal Mine” –Benjamin Keys, UPenn Wharton
Sprinkles from the Right
- Some commentators argue that the reason insurers are fleeing mostly Democratic-led states like California and New York is that politicians and regulators have enacted too strict price controls for insurance.
- Others contend that while many left-leaning pundits are quick to blame climate change for insurance issues in recent years, most of the trouble can be assigned to California and other states’ poor management of wildfires.
- “Here’s why insurers are fleeing California” –Las Vegas Review-Journal Editorial Board
- “The real reason State Farm won’t sell home insurance in California anymore” –Jon Miltimore, Washington Examiner
- “Why house payments will likely soar along with rising insurance rates“ –Jeff Lazerson, Orange County Register
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