Are you having to pay more for your auto and homeowners insurance?  Most Americans are.  According to a news story by CNBC, auto insurance increased by an average of 25 percent.  In some states, it was 40 percent.  Another CNBC story found that home owners insurance increased by 23 percent.

 

At the same time the property-casualty insurance industry is making record profits.  According to the National Association of Insurance Commissioners, profits totaled a record $88 billion in 2023.  AM Best just reported that 2024 profits soared to a record $144 BILLION!  That’s profit.  It’s what’s left after paying all the claims, executive compensation, legal fees, staff payroll, celebrity spokespeople, advertising, and everything else. 

 

But the insurance industry is still screaming that the sky is falling and increasing rates.   

 

My friend Sam received an email from his insurance company that said his rates may increase because the industry is dealing with a “hard market” that’s putting “pressure on rates and coverage options.”  Hard market?  Its profit for 2019 – 2023 totals more than $300 billion, and its looking at a possible $170 billion just for 2024.  Other industries would be ecstatic to have profits that high in the bad years

 

The email cites reasons for the “hard market” and why you need to pay more.  They point to an increase in claims, including those caused by natural disasters, and rising costs due to inflation. But let’s look at that.  According to the Insurance Journal, the industry price tag for natural disasters totaled $95 billion in 2023.  Despite having to pay out that $95 billion as well as all the other claims and business costs, Big Insurance still had a record profit of $88 billion.  You can’t claim you can’t afford to do business when you’re raking in profits like that.

 

At the same time Big Insurance can’t be reined in, and customers are at their mercy.

 

The insurance industry can charge you higher premiums whether or not its justified.  Unlike most industries, Congress prohibits federal oversight.  That’s left to the states, but state insurance offices can do little more than approve or reject proposed rate increases based on information provided by the insurer.  Our state insurance offices do not have the staff, funding, or authority to conduct their own reviews, audits, and investigations to determine if rates and coverages are appropriate.

 

At the same time, the 1944 McCarran Ferguson Act exempts the insurance industry from important anti-trust laws, which protect consumers from price-fixing.  Those laws don’t apply for insurance.  They can work together and collude on important factors that influence insurance rates.  Insurance companies conspire to charge you more—and then you get price gouged.  In any other industry this would be a crime with big fines and jail time.   

 

Rising insurance costs are hurting us.  We keep having to pay more despite the insurance industry making record profits.  Consumers need to be protected from unchecked corporate greed.  Increased oversight is what’s needed—not bad laws that further decrease the industry’s already limited accountability to its customers. 

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