S&P Global — 20 November 2024
Daily Update: November 20, 2024
US Auto Insurance Rates Continue to Increase, But Less So
By Nathan Hunt
Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy
American car culture comes with a price tag. In recent years, auto insurance costs have increased rapidly. The average calculated increase in auto insurance for US drivers was 12.0% in 2022 and 16.4% in 2023. This year, the calculated weighted average effective rate change for private auto insurance is up 7.2%. While having the lowest increase in several years is relatively good news for US drivers, those increases have not been evenly distributed across the country.
Drivers in North Carolina are in the unique position of having a calculated effective rate decrease of 0.1% in 2024. Several of the country's largest private auto underwriters, including State Farm Mutual Automobile Insurance Co., Farmers Insurance Group of Cos. and the United Services Automobile Association, have either decreased or will lower their renewal rates in North Carolina in 2024.
Conversely, drivers in New Jersey will see their rates increase an average of 17.5%. Seven other states will see a double-digit increase in 2024: Washington (16.3%), California (14.0%), New York (13.1%), Nevada (12.7%), Connecticut (11.9%), Delaware (11.1%) and Michigan (11.1%).
Berkshire Hathaway Inc.'s Geico Corp. has begun lowering rates in 20 states, including Kansas, Tennessee and Utah, due to dramatically improved underwriting results in 2024. But Geico is also boosting rates in 16 states, including Massachusetts, Minnesota and New Jersey.
Most US state governments provide regulatory oversight of auto insurance rates to protect consumers from excessive, inadequate or discriminatory rates. When a car insurance company wants to raise its rates, it must make a rate filing that includes data on loss trends, replacement costs and profits. While not all states report numbers on rate filings, an S&P Global Market Intelligence analysis found significant approved commercial auto insurance rate hikes this year in Texas, Virginia, Utah, Washington, Pennsylvania and North Carolina.
The Allstate Corp. accounted for four of the 10 most notable personal auto premium increases approved in the third quarter of 2024, with a significant hike of 18.7% affecting close to 485,000 policyholders in New York. Farmers Insurance Group of Cos. received approval for a 7% rate increase in California. Liberty Mutual Fire Insurance Co. received a 41.6% rate hike in California, surpassed only by an Allstate subsidiary's 42.2% rate hike in the state. Insurers in Texas also secured approval for three rate hikes in excess of 15%.
Today is Wednesday, November 20, 2024, and here is today’s essential intelligence.
COP16 Insights: How Latin America Can Help the Private Sector Address Climate Change and Biodiversity Loss
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—Read the article from S&P Global Sustainable1
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—Read the article from S&P Global Ratings
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—Read the article from S&P Dow Jones Indices
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—Read the article from S&P Global Ratings
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—Read the article from S&P Global Commodity Insights
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Dive into the dynamic world of sports betting with the latest episode of MediaTalk. Join host Mike Reynolds as he chats with Dave Forman, vice president of research at the American Gaming Association, to explore the rapid evolution of legal sports betting since the Supreme Court's pivotal 2018 decision. With 39 states now embracing this booming industry, discover how Missouri's recent legalization could impact the market and the anticipated revenue growth as we head into a busy sports season.
—Listen and subscribe to the podcast from S&P Global Market Intelligence
Webinar: Climate Science Through The Eye Of Hurricane Helene (Nov. 21, 2024)
As extreme weather events become increasingly frequent and severe, the need for effective disaster resilience strategies has never been more urgent. In this upcoming webcast, we’ll hear perspectives from weather, climate science and disaster response experts who live and work in the areas hardest hit by Hurricane Helene. Join us as we explore how to leverage climate data, improve modeling of compound and cascading events and understand the short- and long-term impacts of climate change as we face back-to-back disasters around the globe.
—Register for the webinar from S&P Global Sustainable1