Denying claims and lowballing accident victims has become standard operating procedure for many auto insurers.
And rather than help consumers, which is what insurance is designed to do, the system is rigged to bury you in paperwork and leave you bewildered.
It’s the same story year after year: insurance companies will do anything to save a buck, and they aren’t held accountable for their underhanded tactics.
During an industry annual conference earlier this year, Evan Greenberg, the CEO of Chubb Insurance, told his colleagues that the time was right for a prolonged “tort reform” campaign, which is code for attacking consumer’s constitutional right to hold insurance companies and massive corporations accountable in a court of law. “It’s going to take money. It’s going to take talent. It’s going to have to be approached like a long-term political campaign,” Greenberg said.
So, how is this latest trick affecting innocent or unaware consumers? Just look at your car insurance premiums.
What’s Behind the Rapid Increase in Car Insurance Rates?
According to new Consumer Price Index data, car insurance premiums are up almost 21% for the 12 months ending in February. And a report from Bankrate shows average premiums for full-coverage auto insurance hit $2,543 in 2024. The last time car insurance rates rose that much on an annual basis was in 1976.
Legitimate reasons your car insurance premiums increase?
- You got a speeding ticket or moving violation
- You added a new driver to your policy
- There was an increase in claims in your area
What insurance companies claim to be the reasons for rising rates?
- Pandemic-related losses
- Delays in parts
- Rising labor costs
- Increased used car values
Insurance company executives offer several excuses for slamming Americans with these steep rate hikes. They are losing too much money, they say, because of inflation and the rising cost of car repairs. They point to the troubling increase in severe car accidents. They even attempt to blame their own policyholders, who sometimes have no choice but to take them to court when they refuse to pay insurance claims.
Consumer advocacy groups criticize these hikes, arguing that insurers exaggerate their needs and put undue financial strain on consumers.
Take a Closer Look at What They Aren’t Telling You
Is the industry really losing that much money to justify a double-digit increase in premiums? It would appear they aren’t telling the whole truth.
Last year was a record year for the property and casualty insurance industry. In fact, the National Association of Insurance Commissioners says it was the industry’s most profitable year ever, with historic profits topping $88 billion.
According to AM Best, this year looks even better, with first-quarter profitability on pace to shatter 2023’s record high. As consumers pay soaring premiums, Wall Street is also rewarding the insurance giants with record share prices.
And it gets worse. Auto insurance companies pay only 54% of the $340 billion in economic costs associated with motor vehicle crashes each year, based on data from the National Highway Traffic Safety Administration. Crash victims bear 23% of the costs, with charities, health care providers, and local governments (taxpayers) picking up the rest.
It’s a double whammy for policyholders who pay much more premiums but get less coverage after a crash.
How Can The Insurance Companies Be Held Accountable?
The sidestepping of responsibility while justifying skyrocketing premiums is just the latest in a long history of unscrupulous tactics insurance companies use to scam consumers. But smart consumers know a smokescreen when they see one. A consumer’s right to a trial by jury is the only way to hold these insurance companies accountable and right this wrong.