Why did my auto insurance go up in 2023?

Last year’s insurance hard market is continuing into 2024. If you read our email last year, you know this is driven by several reasons, but here are the top three:

1. Large catastrophic claims across the nation depleting claim reserves.
2. Inflation resulting in higher costs to repair and replace homes and vehicles.
3. Higher operating costs for companies due to inflation.

Many companies have announced rate hikes for 2024 already. Industry-wide these rate increases range from 18-22% on the auto to 25-30% on home policies.

We continue to see tightening of underwriting guidelines as well.  If a roof is over 10 years old, many companies are starting to consider depreciation of the roof, as they would a vehicle.  Minimum home policy deductibles are increasing, often to $2500.  Companies are canceling policies due to branches hanging over roofs or having a roof over 20 years old.

This isn’t price gouging.

Insurance companies are trying to restore their reserves to pay for new claims.  All insurance companies keep money in a claim reserve.  When this is depleted by catastrophic events, companies have their own insurance called reinsurance that kicks in to cover claims.  Just like you, insurance companies purchase reinsurance just in case the worst happens, and their losses exceed their claim reserves.  Reinsurance companies also have claim reserves.  Claims have been so catastrophic in the last several years that not only have insurance companies depleted their reserves, but the reinsurance companies are also depleted.

This is not insurance companies trying to gouge the consumer. All insurance company rate increases must be approved by Indiana’s Department of Insurance, so these are not arbitrary rate increases.  

We are paying attention.

We are doing our best for you during this time.  Each week we receive a report that tells us how much our client’s renewal rate increases over the previous year’s policy.  If we see something larger than what we expect, we start looking to see what is going on.   Did you have claims, new drivers, or new vehicles added?  If not, then we start to look at rates from other A-rated companies we represent. 

However, if we moved your insurance in the last year to two, we would not look to move you again this year.  Moving companies too often adversely affects your insurance score.  While you might save a few dollars now, in the long run, you will end up paying more.

Thank you for trusting us!

We know this is not good news but are hoping you won’t shoot the messenger.  Transparency and service to you are high priorities to us, so reach out anytime with questions or for help.  (317-253-1155 or hereforyou@capitolins.com) One of our team who can help will always answer the phone – unless there is an unusual event, in which case your call will be returned on that business day.