Be prepared for auto insurance premiums to go up. State Farm just reported a $7 billion dollar auto underwriting loss.
Many insurance carriers are being pressured by rising costs on auto policies as smartphones distract drivers and repair costs climb. Travelers Insurance Companies and others have begun to increase auto premiums because of higher expenses.
Berkshire Hathaway Inc.’s GEICO has also suffered from higher claims. “Loss costs throughout the auto-insurance industry had been increasing at an unexpected pace,” said Berkshire Chairman Warren Buffett in his annual letter to shareholders.
In addition to higher losses from smartphone usage, insurance companies are seeing higher claims on uninsured/underinsured motorist coverage. This is the result of many people purchasing inadequate insurance limits causing the people they hit to have to recover damages from their own carriers.
Part of the cause for this is, people selecting and purchasing their own limits through online portals without discussing if they have proper coverage with an agent or broker.
Non-Owned Auto Liability rates are also going up on commercial insurance policies.
If you haven’t had a discussion with your agent or broker lately, you should contact them to make sure you have the proper limits for your individual needs.
Please call us if you have any questions or would like assistance from one of our risk management & Insurance consultants. Contact us at 925.693.9912.
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Insurance Management Corporation