Insurance Rate Chaos — How Consumers Feel

Insurance rates — especially homeowners and auto — are climbing higher and higher. For homeowners, insurers face high rebuilding and repair costs. Auto has the same problem. Repairs and parts costs are skyrocketing.

The Insurance Research Council (IRC) did a survey of home and auto insurance policyholders to find out what they think of the growing increases. IRC President Dan Porfilio says though over half of the consumers they contacted said it’s a challenge to pay the rate increases, they think insurers are being fair.

That’s a big surprise.

“Given how inflation and other factors have driven up the cost of auto and homeowners insurance in recent years, the Insurance Research Council was not surprised to learn that paying for these essential coverages has been a financial burden for a sizable number of Americans,” Porfilio said. “Yet at the same time, consumers expressed widespread support in our survey for the fairness of the rating factors used by insurance carriers to price their auto and homeowners policies.”

Here are some details:

  • 85% of personal auto policyholders think it’s fair to consider traffic violations when setting rates
  • 76% think a review of claims history is fair when setting rates
  • 75% say it’s fair to use telematics data to set rates

Those are the positives. The negatives could be used by opponents of credit scoring as proof it should be banned.

  • 45% said education levels should not be considered when setting rates
  • 42% feel the same about gender
  • 41% say whether you’re married or not should be off the table

Those three factors, of the 14 used in the survey, are the only factors that didn’t get support from the majority of those surveyed.

When it comes to homeowners rate increases, all 19 factors were said to be fair. And the report notes that they’re fair by “sizable majorities.”

  • 80% said its fair for insurers to consider safety systems like smoke detectors
  • That same 80% said it’s fair to consider the overall condition of a home when setting rates
  • That same 80% also said it’s fair to consider the size of the home
  • Just 40% — though — said using rating variables to consider connected devices like security systems, is unfair
  • 38% said it is unfair to consider the conditions of surrounding buildings when setting rates

Source link: —

About PIA Western Alliance

The Professional Insurance Agents Western Alliance is a membership organization promoting and enhancing the success of independent agencies seeking to grow, learn and be heard within the industry.


More Industry News