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This has become a significant political issue in most states, and auto insurance is regulated at the state level. Many insurance commissioners are elected posit

This has become a significant political issue in most states, and auto insurance is regulated at the state level. Many insurance commissioners are elected positions, and if not they are closely tied to the governor. No one wants premiums to go up during inflation, so there is government pressure like never before. What happened is that with the shutdowns, profits went from 2-3% to 20-30%. Some of that money was given back to consumers, but most went into an absolutely insane soft market where every carrier paid more than they ever had to acquire any driver they could. This led to a lot of carriers having drivers on their books that they really didn't know how to price correctly. Everyone realized at roughly the same time that they had screwed up more than usual - and that was when drivers got back on the roads. Suddenly frequency and severity of accidents were up to historic levels because everyone forgot how to drive and is driving ANGRY. So there's a double whammy, it's drivers they haven't insured before on the one hand and the drivers they do know how to price changing their behavior en-masse. So we've gone from once-in-a-lifetime industry profits to massive losses. For the first time, when the carriers tell the government the price is unsustainable they actually mean it. Hence the California shut downs - carriers are TRULY taking a loss on most policies they write and are trying to shut down new customer operations as much as legally possible. You'll notice a surprising lack of auto insurance ads on tv compared to 3-4 years ago. Progressive's underwriters are so far ahead of everybody that they got a lot of their price changes submitted before everyone (the other carriers and the government) figured out what was going on. You can see that in many states where the prices are public, in an incomprehensible data format. So they have been one of the only carriers still getting new customers. It's basically been a state-by-state showdown now between state insurance commissioners and carriers, and the commissioners are starting to give in. Premiums were up almost 20% last year nation-wide and it's only going up.

acjohnson55 3y ago
Even Progressive last year said they were basically uninterested in new business.
simonbarker87 3y ago
> state insurance commissioner As a Brit the fact this position exists AND is elected is bonkers to me. It seems like the US talks about a free market but has done everything possible to add voting and red tape all over the place.
- deleted 3y ago
  [deleted]
- danuker 3y ago
  That is when you realize "free market" means "our buddies at the top can charge whatever they want, and you may not compete". Same with healthcare, telecom, financial services...
- PH95VuimJjqBqy 3y ago
  state mandated insurance shouldn't be legal unless either the states or the insurance companies themselves carry the entire risk. Car Insurance in the US has turned into a tax on the poor. I don't mind the idea of insurance, but I do mind the idea of insurance companies trying to lessen their risk by getting the state to mandate everyone needs to pay for it. If someone is paying insurance and the other driver doesn't carry insurance and doesn't have the money to sue for it, that's the risk of doing business as an insurance company. It's regulatory capture, plain and simple. And lets not even get started on police enforcing it and writing tickets or impounding vehicles of people who don't have insurance. Who doesn't carry insurance? Those who cannot afford to. The state is literally causing harm here.
  - chrisandchris 3y ago
    I like state mandated car insurance (provided by provate companies). While there may be downsides, I'm happy to know that if a car hits me or my car, there is an insurance who pays (and it goes not to my insurer).
    - PH95VuimJjqBqy 3y ago
      Whether the other car has insurance or not is irrelevant to you. Your car insurance is going to pay or not pay based upon their internal policies. What the other car having insurance does is give someone for _your_ insurance company to sue to recoup their money. Most individuals aren't going to be worth sue-ing, but other insurance companies will be. And most major insurance companies are going to have in-place agreements so that litigation isn't actually necessary (because it's more expensive). The other vehicle being covered by insurance is absolutely _no_ guarantee that _your_ insurance won't decide to declare the vehicle a total loss. I myself drive a 2004 corolla that's had a salvage title since the mid-2000's due to someone hitting me. I chose to "buy" the salvage title from them and that vehicle has been 100% solid. They scrapped it because they didn't want to fix the body damage. The insurance have had their cake and are eating it too. They're not required to cover you, but you're required to be covered.

acjohnson55 3y ago

Even Progressive last year said they were basically uninterested in new business.

simonbarker87 3y ago

> state insurance commissioner As a Brit the fact this position exists AND is elected is bonkers to me. It seems like the US talks about a free market but has done everything possible to add voting and red tape all over the place.

deleted 3y ago
[deleted]
danuker 3y ago
That is when you realize "free market" means "our buddies at the top can charge whatever they want, and you may not compete". Same with healthcare, telecom, financial services...
PH95VuimJjqBqy 3y ago
state mandated insurance shouldn't be legal unless either the states or the insurance companies themselves carry the entire risk. Car Insurance in the US has turned into a tax on the poor. I don't mind the idea of insurance, but I do mind the idea of insurance companies trying to lessen their risk by getting the state to mandate everyone needs to pay for it. If someone is paying insurance and the other driver doesn't carry insurance and doesn't have the money to sue for it, that's the risk of doing business as an insurance company. It's regulatory capture, plain and simple. And lets not even get started on police enforcing it and writing tickets or impounding vehicles of people who don't have insurance. Who doesn't carry insurance? Those who cannot afford to. The state is literally causing harm here.
- chrisandchris 3y ago
  I like state mandated car insurance (provided by provate companies). While there may be downsides, I'm happy to know that if a car hits me or my car, there is an insurance who pays (and it goes not to my insurer).
  - PH95VuimJjqBqy 3y ago
    Whether the other car has insurance or not is irrelevant to you. Your car insurance is going to pay or not pay based upon their internal policies. What the other car having insurance does is give someone for _your_ insurance company to sue to recoup their money. Most individuals aren't going to be worth sue-ing, but other insurance companies will be. And most major insurance companies are going to have in-place agreements so that litigation isn't actually necessary (because it's more expensive). The other vehicle being covered by insurance is absolutely _no_ guarantee that _your_ insurance won't decide to declare the vehicle a total loss. I myself drive a 2004 corolla that's had a salvage title since the mid-2000's due to someone hitting me. I chose to "buy" the salvage title from them and that vehicle has been 100% solid. They scrapped it because they didn't want to fix the body damage. The insurance have had their cake and are eating it too. They're not required to cover you, but you're required to be covered.